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US moves to tax remittances sent to BVI

Two of the money transfer companies located in the British Virgin Islands

By Horace Mills, BVI News Online Staff

Persons in the United States sending remittances to the British Virgin Islands (BVI) may soon have to fork out more funds to cover a proposed tax amounting to 2 percent of the remittance being sent.

The United States government listed the BVI among 43 countries to be affected by the proposed tax, which is now before Congress in the form of a Bill titled Border Wall Funding Act 2017.

Its aim is to help fund one of President Donald Trump’s signature election promises – the construction of a wall at the country’s border with Mexico.

In addition to the BVI, other countries listed in the Bill include Mexico, Cuba, Jamaica, the Cayman Islands, Haiti, Dominican Republic, the Bahamas, Turks and Caicos, Anguilla, Antigua and Barbuda, Saint Kitts and Nevis, Montserrat, Dominica, St Lucia, St Vincent and the Grenadines, Barbados, Grenada, and Guyana.

The proposed law said: “If the designated recipient of a remittance transfer is located in a foreign country described [above], a remittance transfer provider shall collect from the sender of such remittance transfer a remittance fee equal to 2 percent of the United States dollar amount to be transferred – excluding any fees or other charges imposed by the remittance transfer provider.”

The Bill recommends punishment for people who knowingly try to evade the proposed tax. “[Such person] shall be subject to a penalty of not more than $500,000 or twice the value of the funds involved in the remittance transfer, whichever is greater, OR imprisonment for not more than 20 years, OR both”.

Action would also be taken against any country that aids or harbours an individual conspiring to avoid the tax, according to the Bill. “[Such country] shall be ineligible to receive foreign assistance and to participate in the visa waiver programme or any other programmes at the discretion” of the United States government.

Illegal immigrants sending money home

Congressman Mike Rogers, who introduced the proposed law, said remittances or wire transfers are commonly used by “illegal immigrants to move money from the United States to their home countries”.

Rogers added that Mexico alone received more than $24 billion in remittances sent from the United States in 2014, while other South and Central American countries received more than 15% of their Gross Domestic Products in the form of remittances.

“President Trump has made it very clear that he intends to complete a wall along our Southern border. As a senior member of the Homeland Security committee, I have long supported the border wall, which will protect Americans,” Rogers said.

He added: “In order to jump start the funding of the wall, I have introduced a Bill to impose a 2 percent fee on remittances sent south of the border. This Bill is simple – anyone who sends their money to countries that benefit from our porous borders and illegal immigration should be responsible for providing some of the funds needed to complete the wall. This Bill keeps money in the American economy and, most importantly, it creates a funding stream to build the wall.”

Copyright 2018 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.

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