The Peruvian novelist Mario Vargas Llosa, 79, who was linked to an offshore company cited in the Panama Papers, says burdensome taxes can justify a decision by individuals and corporations alike to “break the law.”
“There are countries where taxes are similar to expropriation and one must understand that there are companies, individuals or families that seek to escape what they perceive as a terrible threat to their future,” Vargas told French media outlet France Inter on Friday.
The South American writer went on to note that it is important for individuals to respect the laws of a democratic society, but argued "there are laws that push one to break the law."
He described Panama as a country that has progressed “thanks to a system that allows” countries to host foreign owned companies.
Leaked documents and other research have shown widespread tax evasion committed by wealthy individuals through the creation of "shell companies," which are created for the exclusive purpose of hiding the identities of the owners of valuable assets.
“There are countries that progress thanks to that situation," he said, "as with Panama and before with Switzerland."
According to leaked document acquired by the Spanish news site El Confidencial, Vargas Llosa "was very close to controlling the Talome Services Corporation along with his ex-wife Patricia Llosa for a brief period in 2010."
The couple purchased their offshore company via a Dutch intermediary, Pan-Investment Management, that also conducts business in Cyprus and Luxembourg, and which used the couple’s residential mailing address as the contact address.
Vargas Llosa was awarded the Nobel Prize for Literature on Oct. 7, 2010. El Confidencial says the company's shareholders were changed from Vargas Llosa and his ex-wife to two Russians on Oct. 12.
At a press conference on Thursday, Vargas Llosa denied any wrongdoing.
In 1990, Vargas Llosa unsuccessfully ran for president in Peru on a center-right political platform, losing to future dictator Alberto Fujimori.