Jeovany Jimenez Vega, 6 June 2016 — In recent weeks, the world has taken a great interest in the scandalous revelations of the Panama Papers. Millions of documents have revealed the shady side of celebrities, politicians and leaders in every region and of all political colours. And, of course, a government as chameleon-like as Cuba’s was not going to be an amazing exception, the missing condiment in this soup.
The very serious revelation that the Castros’ government and its Venezuelan counterpart contracted the services of a German business, by way of the Mossack Fonseca law firm — trying in that way to not appear tied in with such unsavoury accomplices — to arrange the production of the current version of the Venezuelan passport, and the subsequent control over the distribution of this document since then by Havana, has been the most embarrassing thing that has been revealed by these documents about the island’s government. Continue reading “Cuba, a Tax Haven for the Untouchables / Jeovany Jimenez Vega”
Although many people are waiting avidly for new revelations which incriminate high Cuban officials, this writer would not be surprised, nevertheless, if absolutely nothing of the sort happens. This certainty derives from a total conviction in a long-established truth, which is the most obvious and elemental of all: none of the Castros has ever needed to deposit his fortune or cover up his activities in tax havens, simply because they have never needed to avoid any kind of audit. They alone are their only auditors, judges and participants in their shady activities, in which nobody else can stick their fingers in — period. Or, in fewer words, both dictators have always considered Cuba to be their exclusive private tax haven.
In order to back up this accusation, let’s look at the most widely-held definition of what is a tax haven. Normally it is considered to be any territory or country which complies basically with the following conditions:
If the jurisdiction levies no taxes, if it permits non-residents to benefit from tax breaks, even when they in fact carry out no activities in the country.
If there is no transparency, if there are strictly private bank accounts, and the personal details of owners and company shareholders do not appear in public records, or indeed they permit formal representatives, called nominees, to be employed.
If the laws or administrative practices do not permit interchange of information with other countries or international organisations for fiscal purposes in relation to taxpayers benefitting from exceptionally low tax rates.
In order to understand the present analysis, we have to start off from the incontrovertible premise that the same geographical space is cohabited by two antagonistic Cubas. One of them is the Cuba of the dictators and the regime’s historic “sacred cows,” and a whole entourage of opportunists, high level executives, managers of important companies, all of whom are absolutely tied in with the government, and the highest level officials of the Ministry of the Interior and the armed forces, as well as Cuban ambassadors overseas. Their respective families and lovers also belong to this elite, along with good friends, and the cream of this Cuban neo-bourgeoisie, the emerging upper middle class, and also — and why not? — all those businessmen and foreign diplomats resident in the island.
A completely different totally opposed reality, is the life lived by the ordinary Cuban. 90% of us Cubans live in this lower class Cuba, and this is where I live, with my family and all my friends, just like the overwhelming majority of Cuban professionals and everyone who works for the state. It is the Cuba of miserable salaries and the everyday pursuit of your daily bread. It is this Cuba, which is poor and hopeless, that wave after wave of Cuban young people are fleeing.
So we have the upper class Cuba convinced that it has no obligation to account for anything to lower class Cuba. If we consider these realities, only apparently overlapping, as two separate countries, which in practice is what they are, we are then able to understand why it is not hyperbole or gratuitous to say that the Castros have for more than 50 years enjoyed the advantages of having their own tax haven.
But, finally, why should we consider Cuba to be a tax haven? Very simply, we are talking about a country without the most basic legal or civic mechanisms to indict the most corrupt, because it is precisely those people who call the shots. It is a country without division of powers, which guarantees the total impunity of those people.
There has never existed in post-revolutionary Cuba either an official press which denounces anything, or a police authority which investigates anything, or a public prosecutor which accuses any one of the most corrupt people in the government, because — get this — you cannot take at face value the the periodic purges of disgraced officials, because in these cases the order always comes from the current dictator’s executive, and never from the judicial system which should naturally deal with it. There are far more than enough examples of investigations which have faded away into nothing when they have been countermanded from above, which no-one dares to question.
When you check it out, there are all the elements here of the above-mentioned definition. We have a caste which doesn’t pay any taxes on their informal or illegal businesses, or if they do pay them, they are just a token in relation to the real level of their income.
We have a government which has always practised the most absolute and systemic secrecy in relation to the private lives and real incomes of its most important chiefs, and also a rigid censorship over whatever may be produced to evidence their over-the-top schemes, managed by unscrupulous front men, referred to above as nominees. And finally we have a body of law, for the most part in violation of the most important human rights, but made to measure for the aspirations of the elite to maintain their power and influence.
Cuba is still today a tax haven for the untouchables, with all institutions in submission to this privileged class which lives like kings on the Olympic heights, disconnected from the reality of the people who live beneath them in poverty and want.
In fact, if you asked a thief or corporate tight-wad who want to fill their bank accounts on the margins of any tax responsibility, what would be the country of their dreams, they would definitely say that that country would have a government which didn’t waste its time on listening to useless pleas from its people, which was hard-line and keeping a grip on its power — it would be ideal if, by the way, it was the only one legally recognised in the constitution — and which would guarantee that it would leave me in peace to get on with my business dealings, sorting out unionists and trouble makers. That is to say, a government keen on the most profitable exploitation of whatever you can come up with.
Our hypothetical crook would say that in that fantasy world, I would have a monopoly of all markets, which would practically make me a God who could order, to my heart’s content, the fate of millions of consumers who would have no choice apart from what I offer, which would allow me to speculate by selling dear whatever cheapo thing I imported.
I would love to carry out my activities, our respondent would continue, among serious, upright people and businessmen who understand that the best business is the one which generates the most profit in the shortest time possible, no matter who may be hurt.
I would like a country to have no division of powers, in which every judge, right up to the Supreme Court, was subordinated to a powerful man, an arch-calculator, through whom everything flows, as smooth as silk, and protected from indiscreet gazes.
Just think, dear reader, whether that elite country, the above-mentioned Cuba, with its life-long privileged class, where greed and opportunism reigns, the Cuba of despotic generals and criminals who go unpunished, should not be considered to be a genuine and very exclusive tax haven. If such a country could not be classified as such, then a guanábana is not a spiky green fruit. Needless to say, whatever similarity to real life here would not be a coincidence. Draw your own conclusions
Translated by GH