Artful Dodgers

All over the world, taxpayers come up with ever more inventive ways to keep their earnings firmly in their own pockets. But tax collectors can be creative, too. 
 

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No-one likes to pay taxes – and most of us would agree that large corporations are particularly successful in minimising their tax. In fact, corporate lawyers and accountants have made an art form of dodging through the mazes that are most countries’ tax systems. Perhaps that’s why it is heartening to hear that other citizens are also getting positive tax breaks.

Last December, for example, a Norwegian court of appeals ruled that striptease was an art form and should be exempt from value-added tax (their GST). The owners of the Diamond Go-Go Bar in Oslo had refused to pay a tax of 25% on entry fees, on the basis that striptease dancers were stage artists, just like comedians and sword-swallowers, and therefore deserving of the same status.

The news spread quickly to Amsterdam, where a Dutch judge wholeheartedly agreed. He ruled that peepshows, where sex workers performing strip shows and explicit acts can be watched from booths (even by judges, should they wish, presumably), are a form of theatre, entitling club owners to a tax break.

“Admitting customers to peepshows is equivalent to admitting them to a theatre performance,” stated the ruling. “The erotic character of the performance does not diminish that.”

Tax authorities in India used performance art of a different kind last year. In the state of Bihar, the cash-strapped government decided to collect overdue tax revenue of around $14,000 by employing bands of singing eunuchs gaily clad in saris to sit outside tax defaulters’ homes. The eunuchs, feared by many, were paid a 4% commission on any tax collected. So they staged sit-ins and beat drums outside the homes of reluctant taxpayers – and achieved exceptional results within 48 hours.

Over in Europe, Romania also faces its own unique tax problems. For every officially registered witch in Romania – one, in fact – who pays tax on her mystical services, another 4000 or so cast their spells tax-free, costing the treasury millions.

Witch services include stargazing, fortune-telling and talking to the dead, and they’re big business in Romania. So, too, are vampirism, spells, hexes and curses; even companies have been known to consult the experts.

But as of last year, only witch Gabriela Ciucur, who sees up to seven clients a day and charges about $15 per session, was issuing receipts and toeing the official taxation line. This left the authorities consulting their crystal balls to gather details about the incomes of other witches.

But the witches aren’t about to allow authorities to sweep them off their brooms. “Why should we pay taxes when we don’t get anything from the state?” says Maria Campina, 57, the self-proclaimed White Magic Queen and a local witch leader. “We already do a lot for our country. Whenever there’s an important Christian celebration, we perform a ritual to protect the country from natural disasters – that has to be worth more than any tax income.”

In China, meanwhile, the tax office launched a drive last year to persuade people who earn more than $20,000 per year – a group estimated to number a million – to pay income tax. Not surprisingly, there weren’t many takers: only 3000 volunteered. Almost half of those taxpayers live in Beijing, but in some cities not a single person registered to pay. Not surprisingly, only 7% of China’s government revenue comes from personal income tax.

Another Chinese tax-raising idea had a very different result, however. City authorities in Zhangzhou, in China’s southern Fujian province, decided to give schoolchildren whose parents paid high taxes bonus points in their public exams. This caused outrage in Zhangzhou where, as is the case elsewhere in China, there is a ferocious battle for access to the best schools.

Given that most people in China pay no income tax, with the amount of income declared for tax purposes commonly viewed as negotiable, big taxpayers are regarded as unusually public-minded and generous.

 
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