Liberty and justice for all United States persons abroad

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With the release of the 2012 Country Reports on Human Rights Practices yesterday, it seems the U.S. State Department has finally realised its hypocrisy in condemning Eritrea for imposing tax on the Eritrean diaspora to fund wars in Africa, while aiding the IRS to impose tax on the American diaspora so that the US can also fund wars in Africa, and the Middle East, and Central Asia, and …

Unfortunately, State’s response has not been to levy similar criticisms against the IRS or to stop cooperating with it, but instead to tone down their criticisms of Eritrea. While the 2010 and 2011 reports are virtually identical in the wording they use to condemn Eritrea’s diaspora tax, the 2012 report shows subtle shifts in language, providing classic examples of “framing techniques” that a writer can use to address roughly the same set of underlying facts while leading the reader to take sharply different attitudes towards those facts.

The actual text

2011 report

2012 report
There were also reports of security forces arresting persons whose foreign family members did not pay their extraterritorial income tax of 2 percent of foreign earned income … Other diaspora Eritreans whom the regime deemed insufficiently loyal—either through lack of tax payments or other support—asserted that their families in Eritrea were subjected to government harassment …
Increasingly, children of any age were denied exit visas either on the grounds that they were approaching the age of eligibility for national service or because their foreign-based parents had not paid the 2 percent income tax required of all citizens residing abroad. Some parents avoided seeking exit permits for children approaching the age of eligibility for national service due to concern that they would be denied permission to travel, although other adolescents were granted exit permits. Diaspora members who visited the country reported being required to pay a 2-percent tax on foreign earned income before being given exit visas.
In general citizens had the right to return. However, citizens residing abroad had to show proof that they paid the 2 percent tax on foreign earned income to be eligible for some government services, including exit visas for future departures from the country. In general citizens had the right to return. However, citizens residing abroad had to show proof that they paid the 2-percent tax on foreign earned income to be eligible for some government services, including passport renewals.

 

Let’s be clear from the start: these changes in language do not reflect actual improvements in the human rights situation in Eritrea between 2011 and 2013. Human Rights Watch’s Eritrea chapter of its 2013 World Report is just as harsh in its criticisms of Eritrea as the 2012 World Report. Swedish newspapers in 2013 continue to refer to the Eritrean government’s treatment of its diaspora as “systematic oppression”. And the situation for Eritreans in Canada improved not due to any new-found respect for human rights on the part of the Eritrean government, but only because Ottawa stood up and told them to cut it out.

“Reports” vs. “assertions”

First and foremost, the “reports” of harassment in the 2011 text have been downgraded to mere “assertions” in the 2012 text. “Reports” makes it seem like a factual, well-verified phenomenon; indeed, this is why the State Department calls these texts “Human Rights Reports” rather than” Assertions About Human Rights”.

At risk of sounding like a 4th-grader trying to pad out a book report (there’s that word again!), let me quote the dictionary, which defines a “report” as “an account or statement describing in detail an event, situation, or the like, usually as the result of observation, inquiry, etc.” In contrast, “assertion” reduces the whole thing to a he-said she-said: maybe it’s true, or maybe those diaspora whiners are lying because they fled the country to avoid taxes and don’t want to pay their “fair share”.

Exit visas

Second, notice the change of agency in the inability to obtain exit visas: in the 2011 Report, parents of children are the victims of the bureaucracy which refuses to let them out; in the 2012 Report, it’s allegedly the parents themselves who are deciding not to apply for exit visas. And the non-payment of the tax itself is no longer reported as grounds for denial of an exit visa; instead, it’s reported as grounds for denial of passport renewal.

In other words, the 2012 Report is much less clear about the link between failure to pay the diaspora tax and the loss of freedom of movement. Mention of “exit visas” brings to mind the Soviet Union and other such unsavory regimes, whereas “passport renewals” sound like a bureaucratic function of fee-for-service on which restrictions might be “legitimately” placed for any number of reasons, the way the U.S. itself has proposed doing — even though passports are just as much an instrument of political control as exit visas, and the U.S. itself has used them as such.

The description of the tax itself

And finally, the “extraterritorial income tax” or the “tax on citizens residing abroad” is now described as a “tax on foreign earned income”, a phrase clearly taken from U.S. tax law without understanding its meaning (since “earned income” like wages is supposed to be contrasted with “unearned income” like bank interest or social assistance payments — but in fact the Eritrean diaspora tax applies to both categories of income).

Edit: as Shadow Raider points out in a comment, the Eritrean diaspora tax is far less broad than U.S. citizenship-based taxation, and only applies to certain categories of what U.S. tax law would classify as “unearned income”: specifically, it does not apply to items I mentioned like bank interest or social assistance payments. It does apply to rental payments.

It also applies to self-employment income, parts of which may be considered either “earned” or “unearned” in U.S. tax law — for example, the dividing line between what counts as “salary” and what counts as “distributions” from an LLC is a frequent topic of U.S. tax planning. I can claim no familiarity with how Eritrean tax law makes the distinction, though I imagine that arguing with an armed “diaspora tax auditor” about the dividing line will produce less-than-ideal results.

The former descriptions — just like “exit visa” — are well-recognisable to any reasonable reader as dictatorial anti-emigrant practises which have been abandoned by all liberalising countries, including the successors of the Soviet Union, the Philippines as it cast off the baggage of the Marcos era, Vietnam during doi moi, and most recently Burma. The latter is a bloodless, bureaucratic phrase which obfuscates rather than informs — it hides the fact that the tax is being imposed on people who do not live in the country which is imposing the tax.

What remains the same?

On the other hand, the complaints that “[t]he government considered persons of Eritrean descent to be citizens and did not recognize their possible citizenship in other nations” and that “[the government did not grant consular access to detained dual citizens” both remain intact from the 2011 report. However, for Eritreans actually in Eritrea, this is nothing more than a straightforward application of the Master Nationality Rule — unfortunate but entirely expected as a matter of international law, and similar to the practises of most countries. And of course, both the Eritrean and U.S. governments are equally guilty of ignoring the fact that members of their respective diasporas have “possible citizenship in other nations”. Apparently whoever decided to tone down the tax criticisms in this year’s report didn’t notice this other bit of ongoing hypocrisy.

43 thoughts on “State Department self-censors criticism of Eritrean diaspora tax in 2012 Human Rights Report”

  3. I think a better name would be: US – Eritrean Diaspora Club sometimes also known as ACA.

    From UN Resolution 2023 (2011):

    “11. Decides that Eritrea shall cease using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals or other individuals of Eritrean descent…….”

    http://www.un.org/News/Press/docs/2011/sc10471.doc.htm

  4. Well, State may be censoring themselves, but at least Voice of America is continuing to speak out. Guess they still have at least some level of editorial independence from the US government:

    The Eritrean government is alleged to make its people pay to leave, punishes families with penalties for “defectors,” and blackmails the diaspora into paying two percent tax on incomes.

    http://www.voanews.com/content/eritrean-refugees-tortured-for-ransom-in-silent-tragedy/1648056.html

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  10. @Innocente, strange. Swiss news today reported just a few weeks ago that Eritreans in Switzerland are still paying the 2% so that their family in Eritrea won’t be harmed:

    Eritreer im Ausland sind gehalten, über ihre konsularischen Vertretungen eine zweiprozentige Diaspora-Steuer auf ihren Einkommen zu entrichten. Daran halten sich selbst Flüchtlinge, um ihre Familienangehörigen zu Hause vor der Verfolgung zu beschützen. Und auch, was sie darüber hinaus an Private überweisen, muss in der Heimat deklariert werden und ist steuerpflichtig.

    http://www.nzz.ch/aktuell/schweiz/jeder-auswanderer-ein-deserteur-1.18077065

    Around 18 000 Eritreans live in Switzerland and they are one of the largest refugee groups. Their social networks are not as strong as Tamils and they are politically passive.

  11. I note that the article states that the reason that the tax collection in Canada is objectionable is:
    “…The fundraising scheme would be illegal because the UN Security Council has imposed sanctions on the Eritrean military due to its destabilizing influence in the Horn of Africa, where it has supplied weapons, money and training to a variety of armed groups such as the al-Qaeda-linked Al-Shabab…”

    So, does that mean that Canada would allow Eritrea to impose and try to collect the 2% diaspora tax IF the UN sanctions were lifted, and thus put Eritrea on the same footing they offer to the US – which imposes US tax on those duals and permanent residents of Canada who have NO US economic connection? Does that mean that it is the foreign policy of our Canadian federal government that Eritrea would be free to impose extraterritorial taxation of Canadians of Eritrean descent as long as they only emulate the same or similar tax assessment, enforcement and reporting requirements and actions of the US? Or does the US get a free pass to do whatever it wants to – because Canada would rather sacrifice the legal assets and earnings of > 1 million Canadian households than irritate the US?

    I note that the US frequently and unilaterally has been a “…….destabilizing influence……….where it has supplied weapons, money and training to a variety of armed groups..” – without seeking UN permission.

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  18. Human Rights Watch just released their 2017 world report. Second year in a row they fail to mention the Eritrean diaspora tax
    https://www.hrw.org/world-report/2017/country-chapters/eritrea
    https://www.hrw.org/world-report/2016/country-chapters/eritrea

    Compare to earlier years

    https://www.hrw.org/world-report/2015/country-chapters/eritrea

    Canada threatened in 2014 to close the Eritrean consulate in Toronto unless it stopped collecting taxes from Eritrean-Canadians. A 2 percent tax on the income of émigrés remains an important but diminishing source of revenue for the government.

    https://www.hrw.org/world-report/2014/country-chapters/eritrea

    Families are also punished when relatives living abroad fail to pay a 2 percent tax on foreign income, retroactive to 1992, or to contribute “national defense” fees. Punishments include revocation of resident families’ business licenses, confiscation of houses and other property, and refusal to issue passports to allow reunification of children and spouses with overseas parents or spouses. …

    In June 2013, Canada expelled Eritrea’s Toronto consul for continuing to solicit “national defense” fees (and the 2 percent tax) from Eritrean expatriates despite Canadian demands that he stop because the practice violated UN sanctions.

    https://www.hrw.org/world-report/2013/country-chapters/eritrea

    Since at least 1995, Eritrea has imposed a 2 percent income tax on Eritrean expatriates (retroactive to 1992) to be eligible for consular services, such as notarizing powers of attorney, certifying educational decrees, and issuance of travel documents. Relatives in Eritrea of expatriates who refuse to pay the tax have been threatened with loss of business licenses or have been prevented from selling property because of a missing notarial. Canada and Germany prohibit collection of the tax, while the Netherlands and others are considering a ban.

    Nothing for two years before that
    2012 https://www.hrw.org/world-report/2012/country-chapters/eritrea
    2011 https://www.hrw.org/world-report/2011/country-chapters/eritrea

    https://www.hrw.org/world-report/2010/country-chapters/eritrea

    Foreign aid, while modest, grew in importance as expatriate Eritreans increasingly protested government repression by refusing to remit Eritrea’s two percent tax on foreign incomes.

    https://www.hrw.org/world-report/2009/country-chapters/africa-eritrea

    Eritrea depends heavily on remittances from Eritreans living abroad, including a 2 percent tax on foreign incomes. Because of Eritrea’s repressive policies, remittances have fallen, from 41 percent of GDP in 2005, to 23 percent in 2007.

    That seems to have been the first mention of the tax; nothing for earlier years
    2008 http://www.refworld.org/docid/47a87c0141.html
    2007 http://www.refworld.org/docid/45aca29eb.html
    2006 http://www.refworld.org/docid/43cfae9f28.html
    2005 https://www.hrw.org/world-report/2005/country-chapters/eritrea

    HRW do mention taxes in other contexts, and not merely to complain about the methods of collection. E.g. here describing how businesses paying taxes to Israeli settlements in the Palestinian territories “contribute to and benefit from Israel’s human rights abuses”
    https://www.hrw.org/report/2016/01/19/occupation-inc/how-settlement-businesses-contribute-israels-violations-palestinian

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