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 (be sure to watch the video as well):
John Baird warns Eritrean consulate over ‘diaspora tax’
Foreign Affairs Minister John Baird says he has sent a message to the Eritrean consulate to stop collecting a “diaspora tax” from Eritrean-Canadians here or he will order the African nation’s consulate closed.
In response to a question from a reporter in Toronto, Baird said the practice of requiring Eritrean-Canadians to pay a tax at the consulate is “unacceptable.”
“We share the deep concern that Eritrean-Canadians, and others, have for the work that has gone on at the consulate. We’ve repeatedly sent out strong signals that is unacceptable, it’s wrong and will not be tolerated,” Baird said.
“I gave instructions to my deputy minister several days ago to very clearly and unequivocally deliver a strong message that this activity must cease and desist, and if it doesn’t we will close the consulate,” Baird said.
Baird said the messages were sent in “recent days” but did not specify when a shutdown of the consulate might occur.
This is just the most recent action Baird has taken against Eritrean officials in Canada over the practice of requiring expatriates to pay what the UN has condemned as a worldwide “diaspora tax” on its nationals, valued at two per cent of their income. Last year, Baird expelled consul general Semere Ghebremariam O. Micael.
Eritreans here have complained that if they don’t pay the tax, their families back home will suffer consequences.
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. I 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 paltry 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?
Unfortunately, it does not appear that commenting is possible with this article. No doubt this story will soon be reported in other outlets so we should all be ready to dig-in.
UPDATE: Just to be clear, in light of recent comments, whatever the relative differences in scope, scale or sophistication between the Eritrean and U.S. versions of citizenship-based taxation; both are repugnant, immoral and indefensible practices. Both countries should hang their heads in shame for even pretending that CBT can ever be justified. The diasporas of both countries should find plenty of common ground here, despite the taunting and ignorance we both have to put up with from so many of our “homelander” cousins.
Wow, Anne Frank, John Richardson, Allison Christians, Arthur Cockfield and every other *US Person* in Canada lending their legal expertise. The generosity of the incredible professionals we have giving of their expertise, their time, their energy is not taken lightly by the rest of us here. Thank you so very much — and thank you, Stephen Kish, for leading the very challenge the legal minds here advise on.
What is happening on these very pages will one day be a part of Canadian history. We must take the stand we do for the rights of ALL Canadians, be they US Persons or not. There will be ripples in the oceans of the world reaching other shores and other fights.
For those looking to comment on the hypocrisy, there is a huffpost article out:
http://www.huffingtonpost.ca/2014/07/09/john-baird-eritrea-diaspora-tax_n_5572529.html
Grateful thanks @Anne Frank for that post. I am re-reading it and savouring each point.
Haven’t read all the comments yet but have just read this post and viewed Baird’s video and I’m hopping mad!. Absolutely shocking hypocrisy. Amongst all the human rights violations that CBT and FATCA represent this particular issue is a flagrant violation of Article 2 of the United Nations Declaration of Human Rights which states: “…no distinction shall be made on the basis of the political, jurisdictional or international status of the country or territory to which a person belongs”, the “person” being anyone who has had his rights violated. Sorry about the hyphenations but an Eritrean-Canadian who has had his rights violated through CBT can get the Minister of Foreign Affairs to go to bat for him and close his former homeland’s consulates! An American-Canadian has to shut up, quit whining and “come clean” to *his* former homeland! If this isn’t a distinction based on the “international status” of a country I don’t know what is! Time to start wall-papering Mr. Baird’s office!
You can’t comment on the CBC article but last night on the Puff Poo piece there were two small comments. Unfortunately they are gone today and as far as I can tell you can’t comment there either. (I opened Puff Poo in 3 different browsers — no luck finding comments.) I’m not sure I could have commented anyway since the sight of Baird’s face produces nausea and it’s hard to type when you have to keep a bucket handy. If I could make it past the nausea and there was an opportunity to comment I would just say:
The U.S. diaspora tax is a hundred times more egregious than the Eritrean diaspora tax. Baird’s outrageous statements shatter the hypocrisy meter since it was HIS PM and HIS fellow Conservative MPs who implemented the U.S. FATCA law in Canada recently. Canada needs to close the American embassy and send the U.S. ambassador packing. Canadian voters need to send Baird packing too at the earliest opportunity.
@EmBee
You dance like a butterfly, and sting like EmBee!
@annefrank
Great food for thought, thanks!
@Anne Frank- that was quite the lengthy exposition. I’m not sure that I get all of it but I do have a question about your statement that the Revenue Rule could possibly be invalidated if the I.G.A. we’re to be struck down?
You seem to link the existence of the Revenue Rule with the tax treaty. I always thought that the Revenue Rule existed apart from the tax treaty. I thought that it was a universal: principle of law whereby the courts of sovereign nations refused to acknowledge the tax claims of foreign governments on their own citizens.or lawful residents. The U.S. also abides doggedly by this rule when it comes to its citizens and lawful residents.
I apologize if I have missed something and/or if I have shown my ignorance.
“Eritrea’s amateur-hour 2% shakedown”
Please care to advise us what they point of the following statement is? Please provide sample of the shakedown that you deem amateur-hour?
Has your family member ever been jailed because you didn’t pay your taxes?
That is a common story for the Eritrea Diaspora. Because you know very little about the life of Eritreans does not give you the privilege to diminish the power that the Eritrean Dictatorship has on the life of Canadian Eritreans.
Do the honorable thing and revise your erroneous statements.
What I don’t understand is two way trade between Canada & Eritrea from 2 million in 2010 to over 360 million in 2013 Canada made more what Eritrea collect from its citizens .what Eritrea has to do simply increase tax for Canadian company from 33%to38% if they don’t like it there is always China.
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@Bereket, good point. We actually believe that a diaspora tax is immoral, and I disagree with Eritrea’s tax and its use of extortion to accomplish its goals.
Yet if Eritrea were as sophisticated as the United States in its attempt to implement its diaspora tax, it will have convinced the government of Canada to hand over the financial information of alleged Eritrean citizens to its internal revenue service. It would convince Canadian politicians that there is nothing they can do because Asmara government has spoken. This is what is happening to people living in Canada whom the USA deems as its own citizens. Merely imprisoning the members of of expat’s family is not particularly organized or methodical. If Eritrea wishes to enter the level of sophistication of the United States it should take note. Otherwise, it is amateurish. It needs to look at the United States as a model of sophistication. It threatens its citizens with 300% of their financial wealth– among other fines and penalties, such that most people here would be utterly ruined if the IRS finds out about their innocent accounts in Canada.
So we are very happy that the government of Canada is addressing sincerely the Eritrean government. But it is hypocritical on the part of Canada not to take on the more sophisticated and troubling government just to the south of us. This is what gives us hope that our law suit will kick butt. When the court sees that Eritreans receive protection from the government and US persons do not, then it is evident that the Charter of Rights and Freedoms article 15 has been severely violated.
Bereket asks, Has your family member ever been jailed because you didn’t pay your taxes? I’m Eritrean and have never paid the 2% and I was never been threatened. As I asked for consular assistance, they asked me to pay and I have just refused it and went out. Without paying money no assistance thats all. My family is doing fine in Eritrea….and I can tell you a 10000 more peoples story like mine! Beside of this no one is jailed because of these voluntary tax issue….no evidence! THATS WHY DON’T LIE, ALL YOU WANT IS TO HURT THE ERITREAN GOVERNMENT BECAUSE YOU ARE ONE OF THOSE ETHIOPIAN SUPPORTED INDIVIDUAL OR JUST A LIAR.
Bereket, Yosief and Berhe…..Welcome to the IBS. I personally welcome your input, and am keen to learn more about how Eritrea’s system works. I sincerely hope that Canada and Eritrea can have relations that are beneficial to both countries.
It’s Canada politically bullying the Eritrean Canadian community. I have not paid the tax and was able to visit Eritrea without issue for me or my family. Bereket is simply lying for political reasons. What Baird is doing is wrong. There had been no case of harassment in Canada as a result of this and the un does not say the tax should be banned.
@Petros
I have no issue with the your lawsuit against the IRS.
What I am saying is this is apples and oranges.
Your group has very little clue about the power the Dictatorship in Eritrea has. Just because they are not utilizing same techniques as the US Government does not make it amateur hour.
I don’t want to diminish the complaints you have with the US Government but in practicality with the $97,600 FEIE (Foreign Earned Income Exclusion) majority of the people who oppose it are rich folks who just want to avoid paying taxes.
Just to remind you that as US Citizens you have the power to vote for your own representatives and have privileges granted by the United States Constitution.
The following is what Human Rights Watch says about Eritrea: Torture, arbitrary detention, and severe restrictions on freedom of expression, association, and religious freedom remain routine in Eritrea. Elections have not been held since Eritrea gained independence in 1993, the constitution has never been implemented, and political parties are not allowed. There are no institutional constraints on President Isaias Afewerki, in power now for twenty years. In addition to ongoing serious human rights abuses, forced labor and indefinite military service prompt thousands of Eritreans to flee the country every year. Access to the country for international humanitarian and human rights organizations is almost impossible and the country has no independent media.
So please keep that in mind when you try compare situation of Eritrea and the USA.
Berhe I agree with you 24yrs in Canada never paid 2% .2yrs ago I asked for ID for my kids to travel to Eritrea all I have to provide was a copy of my Eritrea citizenship and my wife’s and $25 each plus paid postage money order paid to the ministry of finance of the state of Eritrea no mention of 2% only l was ID good for 5yrs I guess I should start paying BTW I have parents and siblings and nothing happened to them and I have been back home twice never been asked to pay the 2%. Please people don’t lie it won’t get you any where. All they have to do is create website and will be asked to print out from and certified copy of your income tax returns by Canadian foreign affairs and send it Eritrea or no service.
You will be hardpressed to find a more detailed or clear run-down and explanation of the 2% rehabilitation tax than that provided by CECCO. The organization represents thousands of Eritrean-Canadians, many who have lived in the country for decades.
Please do refer to this site and consider some of the hard-hitting points they raise: http://www.eritreacanada.org/#!press-releases/cs4q
Thanks for your openness to dialogue and promoting understanding on this very important issue.
Cheers.
Now he is coming with biased HRW reports. Reports with stories gathered from Eritrea’s arch enemies like Ethiopia, Djibouti and some individuals like you. Just pure lies! It is not a secret that Eritrea is targeted by some western countries and NGOs, that do not want to see a country with a self reliance policy in Africa. However, you have yet to present one man or woman that was or is jailed or harassed because of the recovery and rehabilitation tax.
Apologizes to regular readers of Isaac Brock Society.
I have voiced my opinion and will no longer comment. If anyone wants any more info can email me at {edited}.
1. Don’t argue with idiots because they will drag you down to their level and then beat you with experience. —Greg King
2. Never argue with a fool; onlookers may not be able to tell the difference. —Mark Twain
3. Answer not a fool according to his folly, lest thou also be like unto him. —Proverbs 26:4
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@recalcitrantexpat: The “Revenue Rule” is indeed separate from the tax treaty. It is a common law rule first pronounced in the 19th C in the English courts and followed by, among others, the Canadian Supreme Court. I believe there is a thread here or on Maple Sandbox – if not, try Wikipedia. It is very old and established.
The current USA/Canada tax treaty has a limited waiver of the “Revenue Rule” in that Canada agrees to collect “final orders” for taxes (penalties are not mentioned and Finance have indicated that they are not included in the waiver). Final orders mean judgments that are final – not subject to further appeal for a certain sum of money. “File a tax return or else” is not such an order, for example. “You are assessed $45,000 for tax year 2010” is when appeal periods have expired. However, Canada will not assist in the case of orders against dual citizens (i.e. Canadian citizens) in respect of tax years AFTER they became Canadian citizens in respect of income earned inside Canada.
My point of the Charter Challenge is that enforcing foreign tax judgments against permanent residents and not against citizens is also national origin discrimination (and information sharing in aid of unenforceable foreign tax collection proceedings is also likely a violation of privacy rights). We don’t need to go that far to win this case today, but one would appear to me to lead to the other. As I noted, I don’t think the provision has been used or tested in any significant way since it was put in place in the late 90’s (I think 94 or 95).
I have contributed much to Kish’s fund, I will not say how much. I love reading this blog. It delves into so much detail, like how many words end in j?
6 Letter words that end with j
Svaraj
Swaraj
4 Letter words that end with j
Hadj
Hajj
I am just kidding. I play scrabble on internet with this person who is there 24/7. ISB is there too 24/7.
Thank you for clearing that up for me. As I was thinking about the, Revenue Rule, it occurred to me that it is basically R.B.T. and this is what the rest of the world has come to acknowledge by formally adopting R.B.T./Territorial Taxation.
Since the U.S. holds to this rule they should stop playing games and also formally adopt R.B.T. It seems to me that they are being ignorant.
Bereket, you mention that there is an exemption on earned income up to 97K. True enough. But what you fail to understand is that the US tax code is 70,000 pages long and to file you have to pay a cross-border accountant a lot of money to do it right. I know one person who made 50K and paid her accountant 4K (8%) to calculate that she owed nothing to the IRS. 8% is sophistication compared to 2%.