Eritrea: The Proclamations versus the Shabait response doesn’t add up…

“3. Payment of Rehabilitation Tax

With the exception of those who have limited income and are exempt from paying income tax, any individual with income, shall according to the articles specified in this proclamation, has the obligation to pay a rehabilitation tax that takes care of disabled freedom fighters, members of the family of disabled freedom fighters and the martyrs, and those members of the society who sustain injury due to natural catastrophes” (Proclamation 17, 10.12.1991).

I don’t know about you… but when you have old texts and proclamations, which is the legal texts for the theme in question. There should be no shadow of a doubt what is going on. No one should be shocked if the Eritrean government is willing to lie or deceive. That’s what they are known for doing and this regard… they are doing it again.

Yes, the Ministry of Information or Shabait is trying to dismiss stories written about the involuntarily imposed tax. A taxation of the diaspora and a measure, which states that Eritrean citizens in the diaspora have the obligation and shall pay the tax. That differs from the wordings in the article or statement posted yesterday. The Proclamations of 1991 and 1995 isn’t aligned with the wording of Shabait. That should be compelling and telling about how they want it all to look like. Instead of being sincere and honest about the tax. They are instead acting holier then thou, because they don’t think people have access to the documents, which are the basis for the tax in the first place.

As it continues in the 1995 proclamation…

“1. Short title

This proclamation is called “Proclamation Number 67/1995, a Tax Payment Proclamation for Eritreans in Diaspora Who Have Income”.

2. Tax payment

Any Eritrean citizen who lives outside of Eritrea and earns an income from employment, rent from movable and non-movable property, from business, from professional, or from a service charge of any other work or activity must be a 2% (two percent) tax of the net income on a monthly or annual basis” (Tax Payment Proclamation for Eritreans in Diaspora Who Have Income, 10.02.1995).

Now that you have read this part, which are blatant and direct. Both Proclamations was made by the Eritrean government and not grassroot organizations. This was government program or policy, which are a way of raising domestic revenue from outside sources. That is very clear and the intent is there. The proclamations are direct about who has to pay and such. In the 1995 proclamation the Ministry of Foreign Affairs is responsible for collecting the tax payment and have to use the entities or offices associated with the Ministry in the diaspora to do so. The Ministry later is ordered to directly deposit the tax payments to the Ministry of Finance and Development’s treasury account in the Bank of Eritrea. Therefore, we can see the scheme and tax is implemented with a clear goal.

That’s why you have to read these small fragments of the Shabait response on the matter.

Shabait Response in 2023:

“The overriding desire was to imbue some structure and uniformity to what was effectively a burgeoning spontaneous and voluntary grassroots movement. Subsequently with clear objective of funding countries’ social and development programs, in 1994, the Eritrean National Assembly enacted the Rehabilitation and Recovery Tax Proclamation (RRT). The RRT Proclamation specifically targets only Eritrean citizens in the Diaspora, not citizens of other countries of Eritrean descent. The rate was fixed at a low of 2% of net income; in a country where personal income tax is progressive and reaches 38%.” (…) “The legality of the RRT is unambiguous, and purposes laudable. It represents a symbolic burden shared by the Eritreans in Diaspora with the people inside the country. In this sense, its historical, moral, humanitarian and patriotic contents and values are more significant and profound than its material dividend. In fact, the funds collected annually are modest that should not be overstated when compared with the government budget and expenditure on basic social services” (Shabait – ‘Eritrea’s Response to the SEMG, 2014’ 23.02.2023).

I find it very interesting the way and the manner of which Shabait portrays this. It is compelling and really deep, in the sense of despair and need to address it. Yes, the international scrutiny of it can cause a stir. That is only sensible, as the way the Eritrean government has created a diaspora and later taxing them. This is people who has fled the regime and after that they got to pay them too. It isn’t a noble idea or cause, but just shows what the GoE is willing to do with their citizens. Even the citizens who fled into asylum and sought refuge far away from the rulers of Asmara.

Therefore, the premiss for the tax is false. This isn’t done voluntary by the citizens in the diaspora. Neither is the whole thing made out of patriotic values or sentiments. Yes, the proclamations can speak of the martyrs and the families who lost their lives in the war of Independence. However, the monies are directed to the Bank of Eritrea and Ministry of Finance and Development. No one knows what happens with these funds after they are deposited. Neither are the any due diligence or accountability on the matter. The President and his men can spend these funds recklessly. Possibly create new asylum seekers by funding labour camps or keeping soldiers conscripted for years. Therefore, the Shabait must think people are stupid or blind.

This tax is only benefiting the elite and the inner-circle. They are getting a push and revenue to continue to operate their government. That is the gist of things here. While this tax is also a reminder where your loyalty lay and where your home is. So, the Eritrean government got a hold on you… even if you tried to flee into exile.

Home still haunts you and they want 2% of your earnings. You shall pay the percentages and the Ministry of Foreign Affairs are directed to get you to pay them. Peace.

United Kingdom: Nadhim Zahawi MP letter to Prime Minister Rishi Sunak (29.01.2023)

United Kingdom: Prime Minister Rishi Sunak letter to Nadhim Zahawi MP (29.01.2023)

United Kingdom: Kwasi Kwarteng MP resignation letter to Prime Minister Liz Truss (14.10.2022)

Opinion: A biscotti is causing a lot damage

“small, hard Italian biscuits containing almonds (= a type of nut)” (Cambridge Dictionary – ‘Biscotti’).

Just mere days in the stint of Prime Minister Liz Truss. Her appointed Chancellor Kwasi Kwarteng has proposed a “mini-budget” or a biscotti of sorts. That little treat for the 1% and the big-business is hurting the trust in the system. The manner of which the new cabinet and the newly appointed cabinet secretaries are revealing new financial policies are hurting it.

Truss and Kwarteng was supposed to bring confidence back. They was supposed to be there and steady the ship. Instead they are sinking it and doing it fast. It has possibly ensured a new rising inflation and lack of trust in the financial policies of the state. The Chancellor only needed about three weeks in office to wreck it.

The little treat of tax-cuts to the wealthy and a proposed “growth plan”. Only follows 12 years of austerity and other measures, which haven’t created a better economy. The United Kingdom is already hit hard by the global pandemic and the downturn of the Brexit.

It doesn’t help that the Bank of England is talking of Emergency Measures and acts in defiance of the Chancellor. Those things just shows how dire the financial policies are. Truss appointed Kwarteng and his surely not oozing confidence. There is already letters of “No Confidence” sent to the 1922 Committee. It didn’t take long before the knives was out.

This sort of commentary piece says it all about what they are doing: “The chancellor has put his tax changes at the heart of his plans to boost growth. As previous Institute work has highlighted, the tax system has many flaws which act as a block to growth. Kwarteng promised to deliver ‘tax reforms’ to improve the supply side of the economy, but what he announced so far was disappointing for those hoping he might look to grasp the nettle and tackle longstanding tax problems. His version of tax reform is a series of cuts to headline rates that leave the structure of the system – and therefore any existing flaws – in place. He announced cuts to income tax, national insurance and corporation tax, but apart from small changes to capital allowances there was little that would constitute ‘reform’. The evidence suggests that cuts to headline rates alone are unlikely to drive big increases in growth, especially in the current environment where the Bank of England is raising interest rates, and they will certainly not pay for themselves. Kwarteng would do better by addressing longstanding distortions in the tax system, for example the bias towards self-employment and against employees. Changes like this would not need to cost nearly as much as the tax cuts announced and yet could be more effective at delivering growth” (Thomas Pope – ‘Kwasi Kwarteng’s new era of economic policy is a major gamble’ 23.09.2022, Institute for Government).

The commentary puts the weight where it matters. Tax-cuts takes away revenue for the government. Yes, the ones getting the tax-cuts gets to pay less taxes, but nothing is saying that these funds get used for creating new businesses or develop society. Instead, these funds gets taken out of the budgets and out of public revenue. Meaning the government gets poorer and cannot carry the government expenditure. Especially, when the Chancellor only wants to give tax-cuts, but has no direct plan of finding new revenue, because there is possibly deficit with these sorts of tax-cuts.

This is giving the wealthy and the rich a hand. While the nation is furthering into an energy, financial and rising inflation. The United Kingdom isn’t a prosperous nation at this very moment. Instead, it is a nation hurting of the choices of the Tory government for 12 years.

The era of Liz Truss has just started, an a biscotti is destroying it. The Truss cabinet don’t even get an ease or an easy period. Usually, there would be relief and given time after a disastrous reign under Boris Johnson. They have done within no time to destroy the government bonds and the value of the Pound Sterling. These two didn’t even need a whole month or a year. No, they just needed about three weeks and that’s it.

Now people are not only expecting a recession, but a total implosion. The financial markets most valuable asset is trust. Trust and confidence is always needed… right now the Chancellor and Prime Minister is causing more harm. Apparently, the uncapped bankers’ bonuses wasn’t the silver bullet to change the economy, but instead drain it. The same is with the tax-cuts. All of these is only serving one purpose, enriching the rich and given them a handout. However, it isn’t helping the economy and the Chancellor should know this.

That’s why the Pound Stirling is diving. The cost of living will rise even more. The inflation and the recession is now upon the nation. That’s because of how the Tories has handled it all over the years. Not only the last appointees and under PM Truss. No, this is a long time coming with help of Cameron, May and Johnson too. All of them has given way to this, but only the latest comrades who has crashed it totally.

The Chancellor and Prime Minister should reflect on the biscotti. That little treat can be their downfall. The little biscuit can destroy them and be their grand finale. Just because they dared and did so.

Not the wisest move, but what they did anyway. Peace.

Opinion: Trump’s house of cards…

When the whole image, business and public persona is built on lie. The former President Donald J Trump and his Vice Presidents of the Trump Organization is in bigger trouble than ever before. Trump and his kin is now in dire jeopardy. This means that Ivanka Trump, Donald Trump Junior and Eric Trump could all loose licence and ability to run businesses. That’s serious implications, as well, as the possibility to cease all business operation of the Trump Organization itself. Meaning all the corporations connected and in the association with Trump Organization could all cease their works when the case is over.

The case in New York can be detrimental to them. The systemic fraud, tax evasion and wire-fraud. The inflated valuation of the real-estates for loans and decreased evaluation for the taxes. Are the manner of which the Trump Organization has earned fortunes. This is why this whole case is astonishing.

You know it’s really hard hitting when everything is pinned by the NY Attorney General:

“The 16 defendants in this case include: Donald Trump, Donald Trump, Jr., Ivanka Trump, Eric Trump, the Trump Organization Inc., the Trump Organization LLC, the Donald J. Trump Revocable Trust, DJT Holdings LLC, DJT Holdings Managing Member, Allen Weisselberg, Jeffrey McConney, as well as the entities that received the loans that are the subject of the action, including: Trump Endeavor 12 LLC, 401 North Wabash Venture LLC, Trump Old Post Office LLC, 40 Wall Street LLC, and Seven Springs LLC” (NY Attorney General, 21.09.2022).

This case is just shattering how the Trump Organization and everyone involved did this deliberately. They had a scheme which was done in such a fashion. That they lied to the banks and also to the IRS. Not that anyone is a friend with the IRS or the banks, but lying to them for profit is illegal. This wasn’t technicalities, but what the Trump Organization did with all of their means.

The key areas of the 222 pages long lawsuit can boiled down to this:

“The lawsuit alleges that Donald Trump, with the help of his children Donald Trump, Jr., Ivanka Trump, and Eric Trump, and senior executives at the Trump Organization, falsely inflated his net worth by billions of dollars to induce banks to lend money to the Trump Organization on more favorable terms than would otherwise have been available to the company, to satisfy continuing loan covenants, to induce insurers to provide insurance coverage for higher limits and at lower premiums, and to gain tax benefits, among other things. From 2011-2021, Mr. Trump and the Trump Organization knowingly and intentionally created more than 200 false and misleading valuations of assets on his annual Statements of Financial Condition to defraud financial institutions. This conduct was in violation of New York Executive Law 63(12), which gives the Office of the Attorney General (OAG) special and broad powers to go after persistent and repeated fraud and illegality, which in this case includes violating other state laws prohibiting the submission of false financial statements, the falsification of business records, and the commission of insurance fraud. As a consequence of these violations, OAG is seeking, among other relief, to: 1) permanently bar Mr. Trump, Donald Trump, Jr., Ivanka Trump, and Eric Trump from serving as an officer or director in any New York corporation or similar business entity registered and/or licensed in New York state; 2) bar Mr. Trump and the Trump Organization from entering into any New York real estate acquisitions for five years; 3) award disgorgement of all financial benefits obtained through the persistent fraudulent practices, estimated to total $250 million” (NY Attorney General, 21.09.2022).

This here just show how intentional it was done by the Trump Organization. It was year after year and done to secure beneficiary loans or lax taxes. They did this to ensure they paid less taxes and inflated the values to get better conditions on the loans. Therefore, they tricked the banks and the IRS. If a citizen or a low ranking civilian did this. The authorities would have asked for every penny back in a hot minute after the audit of the taxes. However, Trump Organization has been able to get away with it. As a sophisticated blue-collar crime. Now these sorts of violations, breaches and illegalities are catching up with him.

Donald J. Trump and his family members will feel this one. They might loose the ability to run businesses. The same could happen to his Vice Presidents of the Trump Organization too. The actions made by the company and everyone involved are now under jeopardy. After the civilian case in the Southern District of New York (SDNY). This could be pushed to a criminal case by the IRS or others. Therefore, this case is only the beginning.

It doesn’t help Trump’s case either that he pleaded the Fifth in the deposition with the Attorney General a month ago. That he plead the fifth over 400 times and avoided answering any question. It is verify and will be used by the Courts to pin it on him. In the same regard, this case has also shown yet again that he has “obstructed justice” and not followed “subpoenas”. Meaning he didn’t follow proceedings and keeping up with the investigation. That Trump and his company withheld vital documents, which was just kept at Mar-A-Lago and only found by the FBI search on the 8^th August 2022.

Which was described like this: “But even after almost two years of litigation it appears that it may still be the case that not all responsive documents were produced. Among other things, in litigation over a search warrant executed at Mar-a-Lago on August 8, 2022, the United States District Court for the Middle District of Florida noted that “the seized materials include… correspondence related to taxes, and accounting information.” Trump v. United States, 22 Civ. 81294, Order, Docket 64 (S.D. Fla. Sept. 5, 2022). Documents concerning taxes and accounting information would appear to be responsive to OAG’s subpoenas, but no such documents for Mr. Trump were produced by counsel for Mr. Trump despite a representation by that counsel that: I “diligently searched each and every room of Respondent’s private residence located at Mar-a-Lago, including all desks, drawers, nightstands, dressers, closets, etc. I was unable to locate any documents responsive to the Subpoena that have not already been produced to the OAG by the Trump Organization.”” (NY Attorney General, 21.09.2022).

This is compelling and very obvious. It isn’t the first time either. All through the Trump Presidency. His White House and Staff wasn’t following subpoenas or the due process. There been so many times over the years, that Trump stalled or stifled the progression of any investigation. This is what his done and it’s well known. Now it’s just in print and in a Court Document. The NY Attorney General has surely show her finesse and ability to go into detail It will be hard for Trump and the Trump Organization to refute this in Court. Especially, when he pleaded the fifth on every single question ahead of the grand jury. Certainly, Trump and company should feel the burden of proof is on their hands.

Former President is now under the most pressure he has ever been. This could be the end of his lives work and his legacy as a businessman. The Trump Organization can easily be over after this. That is the end-game here and it must be stressful. You shouldn’t feel sorry for Trump or his Company. This has been in the making and the illegalities would catch up to him eventually. It isn’t like the IRS or the authorities would allow someone off the hook for not paying proper taxes. Neither would the banks accept being defrauded and mocked by the Trump Organization taking out these loans on false premises either. Because of all this… there is no real defence on doing it, but his lawyers will surely do their best. Though I have a hard time believing they have any grounds or ability to justify it either.

That’s why this solid case will be the start of everything unravelling. It goes to the heart of Trump. The acts of his business “empire” and what made him “rich”. Now the truth on how it operated and how it made money is shown to the world. Thing will never return to the same or be the same.

Former President Trump is now in trouble and he has nowhere to hide. Peace.

Ukraine: Seized Russian tanks, military vehicles or military equipment is now “tax-free” combat trophies

The war that has lasted over a week now and there been viral videos of farmers or citizens impounding tanks in Ukraine. We have seen the powerful resistance and willpower of the Ukrainian people, as they have no fear to either destroy or burn military vehicles. To take it further some farmers or citizens are even taking military vehicles to their homes or turf. These have either gotten stuck or abounded by Russian soldiers, as they lack logistical support or gasoline to move forward in their invasion.

It’s really striking of the government and the National Agency for the Protection against Corruption (NACP) are making exceptions like these. They are in the middle of war-time and it is circumstances where things are out of control. The taking of military vehicles and equipment is directly helping the motherland and part of self-defence. Therefore, it is really something else.

Just read here:

“Have you captured a Russian tank or armored personnel carrier and are worried about how to declare it? Keep calm and continue to defend the Motherland! There is no need to declare the captured Russian tanks and other equipment, because the cost of this … does not exceed 100 living wages (UAH 248,100)” (…) “Speaking by the letter of the law, combat trophies are not subject to reflection in the declaration for the following reasons: they were acquired not as a result of the conclusion of any type of transaction, but in connection with the full-scale aggression of the Russian Federation on February 24, 2022 against the independent and sovereign Ukrainian state as a continuation the insidious attack of the Russian Federation on Ukraine launched in 2014. Thanks to the courage and victory of the defenders of the Ukrainian state, enemy military equipment usually comes to you already destroyed and disabled, which makes it impossible to evaluate it in accordance with the law On the valuation of property, property rights and professional valuation activities in Ukraine. Therefore, it is also impossible to find out how much such property costs” (Ukraine’s National Agency for the Protection against Corruption (NAPC), 01.03.2022).

So, this is the power of resistance or defiance against the Russian Federation invasion of Ukraine. As the state is defending the taking of combat trophies. The citizens of Ukraine have now free will and ability to scavenge the Russian convoys and left behind military vehicles. This is all part of the law and the authorities is encouraging it.

The Ukrainian farmers or citizens can pick the left behind vehicles or equipment home. There is even a tank, which is now on sale on Ebay. Therefore, everyone is not pinning it to the local government or the authorities, as the Ukrainian Defence can get free vehicles or equipment by this action done by the resilient citizenry. This is commendable in the middle of war and with missiles strikes, air-raids and troubling time…

The NAPC is giving way, but doing it, as this is very costly for the Russian army and doesn’t cost the Ukrainian Republic anything. They are already paying a heavy price for defending the territory and the sovereign integrity.

In the middle of this horrific events and devastations, at least the citizens can get free combat trophies without any hesitation. They citizen can themselves decide the fate over it, they can either destroy it or hands it over the Ministry of Defence. The last option is to hide it on their plots and farms… so, it cannot be used to harm any other citizen or Ukrainian, as its taken in and now its in the ownership of the last user. Peace.

Opinion: The Budget for the FY 2022/23 lacks 2,6 Trillion shillings!

We know that the state during the recent years have been running on deficit financing. This means it takes up loans to pay up for new loans to pay recurring expenditures. The state follows up this negative spiral of lacking of funds to ask for more expenditure than it has funding for. This means, the state is fiscally indisciplined and misusing funds, as they have to later find sources of revenue or take up more loans to fulfil the voted expenditure it has.

That isn’t a sign of a growing economy, but a way to further more loans and add more debt, which has to be paid back with interests in the coming years. As the parts of the government budgets are becoming more expensive, as the state has to fulfil and repay on the debts it has already taken out over the years.

The Minority Report states this:
“The government contradicted itself when it indicated that there would be limited supplementary budgets in FY2022/23 but at the same time elaborately articulate unfunded priorities or additional expenditure needs of UGX 2.62 trillion. Unfortunately, the majority report is silent on this fiscal indiscipline. The indiscipline of supplementary budgets is bound to continue and government hos sent indications that a minimum of UGX 2.62 trillion will be sought in due course” (A MINORITY REPORT ON THE NATIONAL BUDGET FRAMEWORK PAPER FOR FY 2022/23 -2025/26, January 2022).

This here should create headlines, because this is planning to take out loans to cover the current debt, which this will be. Since the state needs borrow or take up loans to cover these expenses. This just show how reckless the state is carrying it’s budgets.

As it can create 2.6 trillion shillings without having any sort of funds or revenue to ensure it. Which means someone else has to foot the bills currently. A creditor will take the debt and make sure the state can pay for the expenses. However, the future citizens has to repay for this and that is fiscal indiscipline and deficit financing. As the deficit needs financing and the shortfall has to be covered, which tends to be covered by debt.

This is unserious of the government and a sign of worry. As they are doing this on the first budget for the financial year and we can know additional supplementary budgets will most likely become bigger than two trillion shillings. We should expect more and the shortfalls might become worse, as all revenue isn’t recovered or the estimated tax-base isn’t as huge as earlier estimates and therefore the state couldn’t perform or have fresh funds to pay for the reoccurring expenses. Peace.

Ghana: Economic Fighters League (EFL) – Abolish the Momo Tax! On the continuing Momo Tax Debacle (20.01.2022)

Opinion: Financial distress and defaulting on loans causes the state to loose Entebbe International Airport

“China is most likely to take over Uganda’s Entebbe International Airport for default on debt repayment. More of Uganda’s national assets are at stake of seizure because of the unrealistic and endless borrowing which has mountained public debt to UGX65 trillion” (Kingdom Media Uganda, 25.11.2021).

The Deficit Financing can only take you so far. The bloated and crony capitalism can only keep you going so far. There been years upon years with loans for all sort of development projects and infrastructure upgrades in general. The loans have gone to buildings, roads and the only international airport in the Republic.

The National Resistance Movement and President Yoweri Kaguta Museveni have over the years promised they have a threshold and control of the amount of debt. However, in 2021 after a downturn and lack of generating revenue. The state is defaulting on it’s loans. The state has taken out loans it cannot carry. Loans are not only the loan, but the services for it too. The loans are with interests and with additional fees, which was accepted on taking the loans. These loans are now maturing and the grace period of not paying interests etc.

The Ministry of Finance, Planning and Economic Development (MoFPED) have promised they can service it and has it under control. They have said it would be used properly and well-spent funds. Nevertheless, the loans are clearly piling up and the state doesn’t have the revenue to pay them. They have recycled to many bad-loans and now they comes to haunt the Republic.

The state is paying for ghosts, huge patronage and a local government structure that is dilapidated from the get-go. Since, the state has such excess of expenditure, but they have to keep that to breathe life into the regime. This is why the state has to spend and use funds like a drunk sailors in port. Just awaiting to be robbed by a bystander or waste a salary at a gentleman’s club. However, this is a serious government and not a drunk lonely man who has been at sea for months on end.

It is tragic, but there been warnings. The Sri Lankan debt to China and what happened there should have been a “red flag”. What happened in Zambia as well should be another story of which the Ugandan government should have reacted too. However, that is clearly asking to much, as kickbacks, graft and grand corruption is part of the diet at the Entebbe/Nakasero State House. They are just eating and doesn’t care about the ramifications of it. Since, the cattle in Rwakitura farm is better taken care off, than how the budgets are financed. This is the sad reality of the Republic in 2021.

The amount of loans and debt will cause more distress. Why? Well, there is no future or ability to clear the debt without any proper revenue. The state needs to find new measures to get fiscal responsible. However, the state cannot just tax things and start to tax people for their every transaction. Because, with doing that… they are taking away money, which will generate more revenue and even more possibility to create new businesses. Yes, the state gets more taxes, but they are also creating a wormhole where there is no option to generate any real income. Since, if you have any transactions, the percentages of money is siphoned by the state and instead of getting invested to make new markets.

Therefore, the state is forced to change the way it operates. However, by doing so… the NRM and Museveni will have to drop cronies. That is something it cannot afford, because they are to eat and not to make the Republic better. This state cannot sustain itself …. and it’s own fault that it defaults on loans. Nevertheless, the citizens and the taxpayers are the first to be hit by this. Not the ones who has issued or taken out the loans over the years. They are the ones that has to fix it or for generations pay the Chinese for ordinary services. Because, the current regime wants SUVs and envelopes to cover for funerals or pay for medical tourism. Peace.