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Happy Hour in Honduras

A former member of the Supervisory Committee of the Executive Directorate of Revenues (DEI) -- Honduras' equivalent to the U.S. International Revenue Service (IRS) -- estimates that the Honduran government is being defrauded of tax revenue by as much 40 percent. Jorge Yllescas Oliva confirmed this week that the government loses between 12-15 billion lempiras ($600-750 million) per year due to corruption at Honduras' 18 Customs offices -- the main ones being in the airports at Tegucigalpa and San Pedro Sula, the port of Puerto Cortés, and the border towns of El Amatillo and Agua Caliente.

According to an audit done in 2012 by Honduras' Superior Tribunal for Accounts (TSC), the biggest losses occurred at the Customs offices at Tegucigalpa's Toncontín airport, followed by the port of Puerto Cortés, and San Pedro Sula's Ramón Villeda Morales airport. At Toncontín, the corruption is so bad that many refer to it as "Happy Hour" -- the entry of two cargo containers for the price of one.

A lot of stuff is being flown, shipped, or driven into Honduras without somebody paying the required import fees and taxes. Some of the guys and gals who work at Customs offices are being bribed (or coerced) to look the other way in exchange for a "commission." Everyone wins, except the government... and, well, public employees, who are cheated out of their salaries because the government never has enough money to pay them in full, and the Honduran people, who never receive decent healthcare and other basic public services like clean water and security, and whose children never receive a real education.

Keep in mind that Honduras already suffers from massive tax evasion on the part of its citizens and businesses. Few pay their fair share. Good, upstanding people rationalize the crime by saying, "Hey, what's the point, the money is going to be stolen or mismanaged anyways." Former DEI director Enrique Castellón said in December 2011 that those in Honduras who actually pay taxes make up only 1.9 percent of the economically active population. It is estimated that Honduras loses about 10 billion lempiras ($500 million) in income annually due to corporate and personal tax evasion.

Boy, it sure is Happy Hour.

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