December 8, 2010

The lists

Flickr image: chisjohnbeckett

In a huge step toward transparency in Honduras, lists of taxpayers who have not paid their past due taxes were published on the Dirección Ejecutivo de Ingresos (DEI, similar to the US's IRS) website on December 1.

The lists were of such interest to Honduras that the website was unavailable much of the day due to overload. The DEI site broke the record for the highest number of visits ever in the history of Honduran government websites, totaling about 360,000 visits and 17,000 downloads in the first few days. In less than a week, the number of visitors has risen to 1.5 million.

Unfortunately for the listees, all that activity alerted Google and now when a search is performed for many of those names, the Google search page provides a link to the government document, along with the amount of their debt plainly described as tax owed to the Honduran government. Not good for business!

The lists include a 4-page list of 58 "grandes" (large) taxpayers whose debt totaled L 788 million and a 55-page list of 1,539 medium and small taxpayers which totaled L. 2.2 billion, for a total of L. 3 billion. The publication follows several months of "amnesty" in which interest and fines were waived if the debts were paid.

The following day, the DEI published lists of those who have failed to file tax returns, as well as businesses who were closed for non-payment or otherwise sanctioned. No amounts were given on those lists, but El Heraldo reports that 2,111 taxpayers owe a total of 4.121 billion. Then, yet two more lists were issued: 385 taxpayers who owe L.824 million and
62 taxpayers who owe L. 217.8 million. Things are really getting confusing, since the dozen reports are dated from November 23 to December 4, some people appear twice on the same list, and others appear on more than one list. It is unclear whether some of these reports overlap or are updates.

The DEI database categorizes 812 large contributors (list) as generating 87% of the total collections. La Tribuna reports that 1,614 medium taxpayers constitute 6% of total collections, and approximately 44,000 small taxpayers make up the remaining amount. That isn't many taxpayers in a country of 7.8 million.

It was hard to skim the long lists due to the inconsistent use of commas in the amounts due, but I found 58 taxpayers who owe more than L.5 million. Those in the 9-figure range are:
  • Han Soll Honduras, L. 526.5 million
  • Hondugres, L.415.4 million,
  • Kensa De Honduras, L. 204.7 million
  • Paradice (sic) Farms, L. 155 million
  • Wintex Honduras, L. 167.2 million
  • A.K.H. SA, L. 149.6 million
  • Atlas Distribuidora de Honduras, L. 102 million

A good question to ask is how these companies were allowed to amass such a large tax bill without serious action being taken sooner.

Some names possibly more well known to north American readers are Kraft Foods, L.18 million; Digicel, L.8.9 million; Alcatel Lucent Mexico, 6.6 million; Ericsson, L.4.5 million; Habitat para Humanity, 2.4 million.


According to the Director Ejecutivo of the DEI, Oswaldo Guillen (photo), publishing of the lists was approved by President Pepe Lobo, who indicated that all debtors should be listed, regardless of political party affiliations.

In a country where everyone seems suspicious of everyone else and where so many vague accusations of corruption are thrown around, getting the facts out in the open is a good thing. Of course, many have expressed doubts about whether the lists were actually complete or accurate. We may never know, but hopefully those who authorized and issued the reports realize the damage to their credibility that would be done by "fudging" the names or numbers.

Kudos to the DEI, the Minister of Finance, and President Lobo for allowing this first step toward real transparency. Apparently it was effective as Guillen stated that there were significantly increased tax collections the following day.

But publishing the lists is only the first step. Taking whatever measures are necessary to collect the taxes is the next. Starting with the largest debtors is the logical way to go.

More work to do, as the diplomats always say

And an additional step toward transparency is also needed. Revistazo, an online newspaper, has officially requested under the transparency law, and has been denied, access to a list of all taxpayers exonerated from paying taxes. Only certain company names have been released resulting in questions about under what law some of those companies would have qualified for exoneration.

This, of course, raises the usual suspicions that the rich and powerful can make back-door deals with politicians. If these exonerations were given in accordance with the law, there is no shame to be had by publishing the lists. However, President Lobo and the Minister of Finance should do everything in their power to take the appropriate action to expose and reverse any 'deals' that were not reached in accordance with the law.

Politics, politics, politics

Unfortunately, some media and bloggers are using the lists for political purposes, picking and choosing the few names they report based on what side of the political fence they are on.

For example, "El Liberator" writes "Empresario que organiza la Teleton le debe al Estado más de 16 millones", exposing José Rafael Ferrari for the debts of his companies Club Deportivo Olimpia (L.6.4 million) and Multifon (L.9.8 million), but fails to mention that the resistance-friendly Rosenthal family also controls companies which owe close to 100 million in back taxes. Half a dozen (so far) resistance bloggers dutifully republished the article with the accusation against Ferrari and again, without mentioning others more near and dear to their hearts.

The DEI list shows that Editorial Honduras S.A. de C.V. owes almost L.12 million. One of the more recent lists shows that Editorial Honduras owes L.81 million. Thinking that was a newspaper, I wanted to know which one. I did some research and found at the bottom of each webpage of the resistance-friendly, Rosenthal controlled newspaper El Tiempo is the following line: "Editorial Honduras, S.A DE C.V | Tel.(504)540-3388 | ©".

Two newspapers reported that Yani Rosenthal, a resistance-friendly potential presidential candidate, is the controlling owner of the soccer team Club Deportivo Marathon (L. 2.8 million). Honduras has a law that candidates who owe taxes may not run for office.

La Tribuna and Revistazo pointed out that both Marathon and Olympia teams owed taxes, La Tribuna without names and Revistazo with. However, Revistazo was initially working from a completely different list and reported several taxpayers by name as being the largest debtors, though they were only in the L.1-3 million range. No correction was made. Revistazo's December 6 article reported several companies by name, but omitted many others with much larger debts.

El Tiempo's original (and apparently only) article on this topic seems to have disappeared from their website It included no disclosure of it's own debt. I now get a 404-Error when I follow Google's link for both Tiempo's and La Tribuna's original articles. I even posted Tribuna's article on Facebook and discussed it with others, but the link no longer works.

nterestingly, I also cannot find El Heraldo's or Proceso Digital's original articles (from a Google news search) in which some companies were named. The apparently edited versions do not include any company names. Wow! Did they all individually have changes of heart or did the word come down from somewhere? Very suspicious and very worrisome.

I tried to find who owned or controlled some of the largest debtor companies but didn't find much of anything. I was surprised that the newspapers didn't devote more time to doing so, especially for political figures, government employees, and government contractors. This gives the impression of "not rocking the boat" or "you scratch my back and I'll scratch yours" which is all too prevalent in Honduras.

I did find one interesting thing.
Oleoproductos de Honduras (L. 29.4 million) and Industria Aceitera S.A. DE C.V. (L. 27.0 million) were being considered for a World Bank loan in mid-2009.

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