The Panama Papers leak has exploded over the internet with the news hitting Reddit, also known as the front page of the Internet, in record time.

A host of documents from Panama-based law firm Mossack Fonseca, spanning almost 40 years was uncovered through a joint effort by more than 100 media groups. The entire database can be found here.

Edward Snowden, the man responsible for a pretty big info leak of his own, called it the biggest leak in the history of data journalism.

But, what is it exactly?

Here's an extremely succinct explanation from Redditor, Dan Gliesack (Thank you, Reddit's explainlikeimfive):

When you get a quarter you put it in the piggy bank. The piggy bank is on a shelf in your closet. Your mom knows this and she checks on it every once in a while, so she knows when you put more money in or spend it.

Now one day, you might decide "I don't want mom to look at my money." So you go over to Johnny's house with an extra piggy bank that you're going to keep in his room. You write your name on it and put it in his closet. Johnny's mom is always very busy, so she never has time to check on his piggy bank. So you can keep yours there and it will stay a secret.

Now all the kids in the neighborhood think this is a good idea, and everyone goes to Johnny's house with extra piggy banks. Now Johnny's closet is full of piggy banks from everyone in the neighborhood.

One day, Johnny's mom comes home and sees all the piggy banks. She gets very mad and calls everyone's parents to let them know.

Now not everyone did this for a bad reason. Eric's older brother always steals from his piggy bank, so he just wanted a better hiding spot. Timmy wanted to save up to buy his mom a birthday present without her knowing. Sammy just did it because he thought it was fun. But many kids did do it for a bad reason. Jacob was stealing people's lunch money and didn't want his parents to figure it out. Michael was stealing money from his mom's purse. Fat Bobby's parents put him on a diet, and didn't want them to figure out when he was buying candy.

Now in real life, many very important people were just caught hiding their piggy banks at Johnny's house in Panama. Today their moms all found out. Pretty soon, we'll know more about which of these important people were doing it for bad reasons and which were doing it for good reasons. But almost everyone is in trouble regardless, because it's against the rules to keep secrets no matter what.

What's all the hoo ha?

The important thing to take note here is the issue of taxes, and how companies, and people, can avoid them by investing in businesses.

It is also important to note that an offshore account does not necessitate guilt, and the original intent of providing this tax rebate was mainly to encourage investments in upstart companies and share the wealth. Problems, however, do start to arise when companies begin to exploit loopholes in the system.

Exploitation occurs when millions upon billions of dollars are invested in shell companies, non-trading companies used as a vehicle for various financial manoeuvres or kept dormant for future use in some other capacity, to enjoy the sweet, sweet taste of tax free revenue.

That is basically what the "hoo" is about -- the "ha" comes about due to the immense scope of the leak.

The leak consisted of some 2.6 terabytes of data, with over 11 million documents and 200,000 fake companies. That's a lot of (potential) corruption to be sieved through.

The initial fear, just like with the Snowden leak, is that the massive amount of data might lead to nonchalance or even blissful ignorance.

But in the days and weeks to come, more revelations will be made for sure pointing to the who's who in society who might be implicated.

Top photo via Wikipedia

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