Manuscript Cultures
Tax fraud: an age-old story
10 April 2016
Day after day, the so-called Panama Papers expose the existence of a tax haven where the world’s elite has set up undeclared offshore companies which are not subject to taxation. This is by no means a new phenomenon: already in the nineteenth century BCE, Assyrian merchants had become masters of fraud and the handling of smuggled goods, with the aim of helping their capital to grow … at their peril!
The private archives discovered in Central Anatolia at Kültepe, known as Kaneš in ancient times, date from the beginning of the second millennium BCE and make it possible for us to retrace the activities of their owners. The archives belonged to merchants originating from the city of Aššur (on the Tigris River, in Iraq), who travelled to Kültepe to sell tin and fine quality textiles, returning home with gold or silver. This long-distance trading activity, favoured by protectionist measures decreed by the King of Aššur, was regulated by commercial agreements ratified with the rulers of the kingdoms the merchants passed through or settled in. In accordance with these agreements, the local authorities guaranteed the Assyrian caravans the right of passage, protection of the routes, and insurance against losses due to theft occurring on the territories under their control. The merchants enjoyed the right of residence and of protection at the trading posts. In return, they were obliged to pay taxes on the caravans at the customs posts situated in the territories they passed through, and duty owed to the Anatolian palaces. Both the Assyrians and the local governments were motivated to renew these treaties: the former sacrificed some of their earnings in exchange for increased security, while the latter drew revenue directly and indirectly from the commerce.
Notwithstanding the commercial treaties, disputes often arose between the Anatolian authorities and the Assyrian merchants. The local palace was not good at settling its debts and dallied in paying for the tin and fine quality fabrics that it purchased from the Assyrians. As for the merchants, in order to increase their profits, which were eroded by an oppressive tax and excise system, they resorted to smuggling. To avoid customs posts on the trading routes, they used alternative roads that were not kept under surveillance ... at risk of encountering bands of brigands who robbed them of their merchandise. To evade tariffs, they only declared a part of the imported goods, the balance being transported by clandestine means:
If the alternative route is reliable, it is by this different route that my tin and fine quality fabrics, as long as the road is traversable, should be conveyed to me by caravan. If the alternative route is impracticable, the tin should be brought to Hurrama. Some of the residents of Hurrama could bring in all of the tin (to the city) in amounts weighing one talent (30kg) each; otherwise, packages weighing 10 or 15 minas (5 or 7kg) each could be brought in; and the caravan workers can bring (the tin) to the city concealed in their undergarments. Once the first talent has successfully been brought to the city, only then should another talent be despatched. Each time an initial convoy of tin arrives safe and sound, send me more by the first departing caravan (and so forth).
Hence it seems the merchants did not hesitate to leave a written account of the various methods that they employed to circumvent the customs posts.
The smuggling activity was successful for some of the merchants, who as result made significant gains but at the same time aroused the envy of their neighbours and risked being denounced to the authorities. Faced with such creativity in fraudulent methods, the authorities took measures against the Assyrian merchants: they were issued with warnings, had their houses searched, were fined, placed under house arrest, and, indeed, imprisoned for tax evasion.
What measures will be taken against the fraudsters exposed in the ‘Panama Papers’?