This week has been eventful in the British tax saga. Unlike the films they produced, Eclipse 35’s not-so-happy ending meant that 300 or so scheme partners would have to stump up £117 million between them. Eclipse 35, the company that traded distribution rights in Disney films like Enchanted and Underdog, did so at a loss (at least on papers) in order to facilitate and allow its investors to claim tax relief. With the judiciary behind the HMRC (UK’s tax collecting authority), it seems likely that HMRC will flex its muscles. Tax avoidance is a common phenomenon. Ingenious tax structures, deep pockets, and thriving offshore industry will just about facilitate anything — if you’re willing to pay the price. In Pakistan, government is yet again embroiled in controversy. Mounting evidence against the Sharifs, inept media representation of the government aides to Panama leaks is proving more damaging for the government than originally envisaged. Uncertainty looms around, stakes are high, and there is a never-ending debate as to what will happen next. The recent dismissal of some senior members of the army on corruption charges in Pakistan, a callous campaign against Prime Minister Cameron in the UK, and Sharif’s rhetoric against tax havens have not helped his case. Speculations are looming wild. Prime Minister Nawaz Sharif’s properties and investments abroad is not a new story. However, the disproportionate media attention propagating against incumbent government seems like a smear campaign against the Sharifs than a tax reform policy. Offshore companies, tax havens, tax avoidance, and tax evasion are terms we don’t really hear every day, especially in Pakistan. There is a legal and a moral debate engulfing these issues, and this article aims to address any misconceptions that the public might have. After carefully reviewing political talk show debates and social media outrage it can be concluded that there is not enough awareness amongst the populace regarding these complex, inter-knitted issues. Extraordinary? Unusual? No! Offshore shell companies are a common instance. It is for this reason that amid the unsavory revelations about authoritarian leaders and their intimates abusing offshore jurisdictions, many legal and financial experts are springing to the defence of the industry. With an estimated seven trillion dollars in offshore tax havens, they are certainly the cog of today’s financial world. The Panama Papers illustrate yet again how perfectly legal corporate structures can be abused to facilitate money laundering and tax evasion or to obscure ill-gotten gains. There are two fundamental reasons for incorporating offshore companies: first, in order to take advantage of a lower tax jurisdiction through effective tax planning and secondly, in order to hide illicit proceeds. Despite robust international regulatory measures to counter money laundering, terrorist finance and curtail corruption, tax havens have been a popular destination in order to strategically and covertly invest money in jurisdictions with higher tax rates. Amazon, Google, Facebook have all caused a stir in the recent past for the low tax payments, perpetrating clever tax avoidance schemes in order to pay lower taxes in high tax jurisdictions such as the UK. What next? Whereas legally the Sharifs have committed no offence by registering and using offshore companies, there are moral issues that arise. First, why are the prime minister and his family not investing in Pakistan? Second, what is the origin of the funds? Addressing the first question, there can be financial repercussions for Pakistan. Lest we forget, we are attracting substantial foreign interest in our energy sector. Is it a legal issue? No, Sharif & co. is entitled to invest wherever they feel their investment is secure. But if the prime minister’s investment is not secure, may God be with the rest. A more pertinent question that springs up and should be an issue for Pakistani administration is the origination of the funds. The Financial Action Task Force’s recommendations explicitly outline transparency and availability of beneficial ownership of the funds as the main issue. Pakistan has been a victim of state-sponsored and non-state, religious fundamentalist terrorism for more than a decade. We have lost approximately $70 billion through tangible damage, sacrificed countless innocent souls and left many scarred for the rest of their lives. These heinous crimes are committed through money laundered through offshore companies, facilitated by local networks. Government must understand that an investigation into the origins of money will further facilitate our law enforcement agencies to eliminate such networks. Pakistan, our media groups, and the agencies must recognise that this is not a campaign against the prime minister himself. If we tread in this direction, sadly, no conclusions will be drawn. The authorities must investigate across the board and the prime minister along with his associates must co-operate with any independent investigation. As Plato said, “No Law or Ordinance is mightier than understanding.” Offshore companies may be legal, but the illegal use of a legal concept must not foster forbearance for illicit practices. What does the prime minister do in such a precarious situation? Well, for starters he needs to sack the people who have been advising him in the recent past. Every move, every step has been a mistake. Terms of Reference (TORs) of the letter sent by the prime minister vindicate opposition’s claims. Whereas the TORs for a judicial enquiry demand an across the board inquiry for all loan defaulters, tax evaders, it is hard to imagine if the purpose of such broad TORs was to buy more time than exercise accountability. Such open-ended TORs mean that accountability will come to a closure before it begins. Accountability? Judging by the demeanor of Pakistan’s media houses and analysts, it seems anything short of prime minister’s resignation will not suffice. No judicial commission will vindicate the prime minister. It is a media trial. The cost for a political post? Yes. With greater power comes greater accountability. Will this story have a happy ending? Unlike films, political events are not scripted (or at least I would like to think so). The prime minister and his family need to come clean. They need to declare everything. Apologise to the nation for any wrongdoing they might have done in the past; we all have made mistakes. Let the people decide and write an ending. The writer is a lawyer, and a Ph.D., ESRC scholar at Warwick’s School of Law. He can be reached on ahmed.k.yousafzai@gmail.com