The Current

Panama Papers expose human costs of global tax avoidance

The leak of the Panama Papers shows a link between the sums siphoned out of developing nations into tax havens and away from basic public services for citizens. It adds up to an estimated $200 billion U.S. a year. The Current connects the dots.
A vendor at the market in Port Louis on the Indian Ocean island, Mauritius. Documents leaked as part of the Panama Papers show Heritage Oil asking to re-locate their company to Mauritius, a country with no capital gains tax. (Jacky Naegelen/Reuters)

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The leak of the Panama Papers has been a global story largely about the rich and powerful caught up in the financial exposé. But dig through records, from law firm Mossack Fonseca, and the real stories are between the ledger lines.

Some of the world's poorest, and least powerful, bear the burden of tax avoidance schemes — revealing the human cost to developing countries when companies don't pay their fair share of tax.

According International Consortium of Investigative Journalists, the group behind the leak of the Panama Papers, Mossack Fonseca helped a company in Uganda sell a perspective oil field to avoid paying $400 million in taxes. The company's address was changed from one tax haven to another.

In a country where one in three people live on less than $1.25 a day, $400 million represents more than the country's health budget. Meanwhile hospitals in the shadow of the oil field, lacked funds for even the most basic equipment. Patients slept on floors and were asked to bring their own medical supplies such as sterile gloves and cotton balls.

In 2010, Heritage Oil, was set to sell its oil fields in Uganda to another oil company Tullow for $1.5 billion U.S. The sale would have meant that the company would owe the Ugandan government over $400 million in capital gains tax.  But documents leaked as part of the Panama Papers show Heritage Oil asking to re-locate their company to Mauritius, a country with no capital gains tax.      

Guests in this segment:

The Current asked Heritage Oil to comment for this segment, but did not hear back.

This segment was produced by The Current's Lara O'Brien and Marc Apollonio.

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