This story may unnerve you… It’s the story of how Eritrea, a small, mostly unheard-of country in East Africa, and the United States, do the same awful thing.
Nearly every country in the world bases its tax system on residency rather than citizenship. If you’re an Italian citizen, and you leave Italy to live and work in Dubai, you don’t have to pay taxes on the income you earn abroad to the Italian government.
But Eritrea levies a 2% flat tax on its citizens who live abroad. If you’re an Eritrean citizen, you have to pay taxes to the Eritrean government, no matter where you live and work.
The media has condemned this as “extortion” and a “repressive” measure by an “authoritarian” government.
ONLY one week after ushering-in FATCA on Canada Day, Canada’s government is warning the Eritrean consulate to stop harassing Eritrean-Canadians or risk closure of its consulate. Foreign Affairs Minister John Baird made the announcement today in Ottawa.
Fair enough to say that this is certainly one of the most egregiously hypocritical moves the Conservative government has ever made – and there have been far too many to count over the years.
We would love to hear Mr. Baird explain to Canadians how it is acceptable for the United States to impose its infinitely more invasive extraterritorial tax laws in Canada but Eritrea’s amateur-hour 2% shakedown warrants impending closure of its consulate? Could it be that Mr. Baird is in fact preparing a subsequent announcement that he will be ordering the immediate closure of the US Embassy as well? Should we give him the benefit of the doubt? Continue reading Stunning Hypocrisy: Canada Threatens Closure of Eritrean Consulate Over Diaspora Tax→
The real question Ottawa must now answer is this: If Eritrea’s 2 % Diaspora Tax is such an egregious example of extra-territorial tax oppression, how does the U.S. escape the same treatment? Yes, we all know what the answer is.
HOW nice to see Canada taking a very hard line with the government of Eritrea and its attempts to impose a diaspora tax on Eritrean citizens now living in Canada. This country really does have a backbone when it comes to standing up to oppression and injustice.
How to explain, then, that while we send the Eritrean consul packing and threaten to shut down the consulate, we let U.S. Ambassador David Jacobsen stay put in Ottawa with nary a word of protest over America’s “diaspora” tax?
There are only two countries in the world that levy income tax based on citizenship rather than residence; one is Eritrea and the other is the United States. But while Canada fulminates and threatens mayhem against Eritrea, it says nothing about the U.S. Even worse, it is actively negotiating with the U.S. to implement an intergovernmental agreement (IGA) that would have Canada Revenue Agency help the U.S. IRS track down its citizens in Canada and bring them into the U.S. tax fold.