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.
The UN has even weighed in. In Resolution 2023, the UN Security Council condemned Eritrea for “using extortion, threats of violence, fraud and other illicit means to collect taxes outside of Eritrea from its nationals.” Continue reading Taxes: Talk of Double Standard and Stunning Hypocrisy