Revenue generation is particularly sensitive for Pakistan's government, which is receiving a $6.6 billion bailout package from the IMF and has a tax-to-GDP ratio of 11 percent, among the lowest in the world.
The leak, comprising 11.5 million documents from Panama-based law firm Mossack Fonseca, shows how some of the world's most powerful people have secreted their money offshore.
Among those named are three of Sharif's four children -- Maryam, who has been tipped to be his political successor; Hasan and Hussain, with the records showing they owned London real estate through offshore companies administered by the firm.
‘Nawaz Sharif does not own any company but having companies in the name of his children also raises questions,’ Umar Cheema of the Center for Investigative Reporting in Pakistan, told AFP.
The centre is partnered with the Investigative Consortium of Independent Journalists, which spent months poring over the documents before Sunday's online release.
‘There are more than 200 Pakistanis which our report has identified, and they include lawyers, lawmakers and some people from the judiciary,’ Cheema said.
Opposition leader Imran Khan called for action against Sharif.
‘Our stance vindicated again as Sharif's wealth stashed abroad exposed,’ he tweeted, adding the country's accountability watchdog, tax authorities and election commission must take action.
But Sharif's son Hussain told the country's largest private broadcaster Geo his family had done ‘nothing wrong’.
‘Those apartments are ours and those offshore companies are also ours,’ he said.
‘There is nothing wrong with it and I have never concealed them, nor do I need to do that.
‘It is according to British law and laws of other countries that it is a legal way to avoid unnecessary tax via offshore companies.’
Hussain said he left Pakistan in 1992 and therefore is not resident, adding Pakistani tax law ‘says that if you are not staying in Pakistan for more than 138 days, then you are not required to declare your assets’.
Regarding Khan's call for the National Accountability Bureau to investigate, he said ‘we voluntarily present ourselves before it or any other judicial and investigative institution in Pakistan’.
Pakistan's information minister Pervez Rashid also denied Sharif's children had committed any crime.
As prime minister, Sharif has invited investment in Pakistan. But the latest revelations could raise uncomfortable questions about why his family has kept their wealth abroad.
A report commissioned by Britain's Department for International Development last year said Pakistan's economy was facing an ‘existential crisis’ stemming from its woeful tax collection rates and inability to finance itself.
Ali Nadir, a financial analyst, said the use of offshore companies was in some cases legitimate.
But he added: ‘I believe political and business leaders will be hard-pressed to take the privacy defence given the worldwide move towards a better track of money, tax evasion, laundering and corruption.
‘This may also start more locally focused probes as there are likely to be disclosure issues.’
The Panama Papers have whipped up a storm of controversy over offshore wealth, ensnaring political leaders, sports figures and underworld members across the globe in the scandal.