Correa wants to ban public office holders who keep money in offshore tax havens

Jul 16, 2016 | 0 comments

President Rafael Correa is seeking a mandate from the Ecuadorean people to see that politicians and public servants who store their money in offshore tax havens are not able to hold office, the president announced in a nationwide address Thursday.

President Rafael Correa

President Rafael Correa

Correa stated that his government had submitted a request to the country’s Constitutional Court seeking permission to run a plebiscite in the upcoming 2017 elections that will consider the issue.

Should the “Yes” side win, all public servants and elected officials will be given a year to repatriate their capital or be removed from office or their post.

President Correa, a trained economist, previously said he would make it his mission to tackle tax havens after the publication of the Panama Papers revealed to the world the depths of the issue.

During his address, Correa said that these tax havens constituted “one of the biggest enemies of our democracies.”

Correa framed the issue as a matter of economic justice, emphasizing that only the rich utilized tax havens.

“In Latin America, 32 million people could escape poverty if this capital, hidden in tax havens, were subject to income tax that corresponds to it,” said Correa, who added secrecy is endemic to tax havens.

“All this not only generates corruption, but also deepens inequality and social differences,” said the Ecuadorean president.

Correa argued that lower-income countries, like Ecuador, are more gravely affected by tax havens.

According to Correa, in the years 2014-2015 alone, a staggering US$3.379 billion was sent from Ecuador to tax havens, an amount that would provide for the wholesale reconstruction of the areas affected by the 7.8 earthquake that struck the country’s coast in April.

One of Correa’s fiercest critics and presidential candidate in the upcoming elections, former banker Guillermo Lasso, is alleged to have money in tax havens.

When asked, Lasso said he had the right to do what he wanted with his capital.

Correa objected to this stance, saying that those who defend that point of view it had a “total lack of ethics and commitment to the homeland,” but did not mention Lasso by name. The proposed referendum will not affect Lasso’s presidential bid, Correa said.

“The fight against tax havens should transcend all ideology,” said Correa.

“It is time to move from speeches to action,” stated the president, who then explained the text of the question to be posed to the country.

The Consitutional Court must first sign off on the plebiscite before it can be posed to voters.

The effort to address the impact of tax havens comes after the Panama Papers, confidential files from the Panamanian law firm Mossack Fonseca, were leaked on April 3, ensnaring high-level Latin American politicians in an alleged tax evasion scandal.


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