7% tax on all $$ leaving the BVI via money transfers
The government of the British Virgin Islands is introducing a seven-percent tax on all monies leaving the territory through money transfer agencies.
This will be made possible through a bill entitled the Financing & Money Services (Amendment) Act 2020, which passed in the House of Assembly on Friday, April 17.
“The fee applies only with respect to monies transferred outside the territory and is to be collected by the licensed transmitter to be paid to the Financial Services Commission (FSC),” Premier Andrew Fahie said during Friday’s sitting of the House.
Fahie, who is also the Minister of Finance, further said the monies collected from all transactions will be deposited into a fund earmarked for various national development initiatives.
Sectors to benefit from fund
While listing a number of areas that will benefit from the fund, Fahie said each of those areas will get 20 percent of the overall taxes collected for monies sent.
He said these areas include programmes benefitting seniors.
“This will include infrastructure, assistance programmes and other initiatives subject to Cabinet’s approval,” Fahie said.
He added: “Educational programmes, infrastructure, scholarships – specifically medical, hospitality, fishing and agriculture areas – and other initiatives subject to Cabinet’s approval will [also] get 20 percent of the proceeds.”
Landbank and first-time homeowners, as well as the fisheries and agriculture sectors, are the three other areas that will each benefit from 20 percent of the overall fund.
7% funds not to receive deductions from FSC
The Finance Minister also said the monies collected from the seven percent will not be subject to other deductions after being collected by the FSC.
According to Fahie, this is to maximize the revenue that will be available to support all intended initiatives.
“The monies collected by the commission will not be subject to the statutory sliding scale percentage withholdings deducted by the commission, and any other revenue that the commission collects and pays over to the government under the Financial Services and Commission Act,” he said.
Premier Fahie described the Bill as a very important development in the territory’s financial services. He said it is needed for times when economies across the world are threatened by pandemics such as COVID-19.
The Financing & Money Services (Amendment) Act must now be assented by the governor to become law.
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I agree one hundred percent
As most businesses pay their suppliers by wire transfer , this will result in a 7% increase in food, fuel everything. So now people not only get hit 7% for sending money home … they also get to pay 7% more for everything.
You are placing a fine on the very people who do all your work. You make it impossible for these people to have a proper bank account so all they have left is Western Union to secure their money with their families back home. Why don’t you in all fairness tax all wire transfers out of the country as well. Then all the money being sent to your offspring and rental money being sent to Villa owners will also be taxed. In the midst of a pandemic the evil Belongers find no rest and continue their racist ways.
So when the big funds here have to pay distributions do you think the investors are going to be happy to pay 7%. Regardless of whether or its right it is a tax on their money and they have a choice not to to be in BVI and will go elsewhere. The BVI will lose millions from this law. And the poorer paid expats who work here and do all of the jobs that non one else wants to do and the not so poorer expats will go home or else.
The BVI Government needs to collect the payroll deductions from all the businesses that don’t pay them.
This is a 7% tax on expats. The Government may as well say go home.
No money will now come into the territory.
Will the USA allow its currency to be artificially restricted like this ? Maybe not.
It’s now time for all Americans to contact your Congressmen and Senators and urge that a duty be placed on all items exported into the BVI from the US and any of its Territories. What is good for the goose is good for the gander. We will see how you all feel when everything you purchase rises 10% or more. Have a nice day and stay safe.
you sound like Trump.
This s timely and pass due. However, it is but a drop in the bucket comparable to what exits the country weekly, and not by small senders.
Millions of dollares leave the territory every week, and the folks who are doing so are not the ones we see standing in line at those money export services.
They are the big players at the top of the money pecking order. That is hopefully where much attention should be focused next.
Last, this is a good beginning at stopping the financial hemorrhaging that has been in existence for over sixty plus years.
Now fellow residents of the BVI for the last 3weeks I been singing there is something much deeper than this virus it’s a new way of life the government is putting on the people
Now you tell me in this so-called pandemic time but see what the hell your government is behind close doors doing just planning how to keep taxing the people . Y’all not helping just making sure y’all milk the dam people for what they got
Shame be on y’all nothing will be the same after this B.S
Please everyone send u all money in envelope through post office like back in the days letter writing
This is a hard one …..we are all struggling around the world…..I want to help my family and friends outside to be able to get food and water……we here in the bvi are not working …..but i order to help those loved ones we will be taxed
The ones sending the monies out of Tortola are the ones who only wants to earn the “America Dollar Bills” to send “Down Island and or other Foreign Countries” , because it’s even more money in their Co9ntry. They never put/spend the monies back into the Tortola community.
Dont they pay taxes, social security, pay for rent, food, electricity and other expenses?
I agree with you Captain,some of those
idiots don’t even know what they’re saying. Expats are the ones whohelp keep the economy going
The Government is owed a lot of money from businesses right here in the BVI – but instead of collecting it they target the people who earn it instead and who have already paid their tax and ssi and nhi.
The same people you are talking about is the very people that working their a** hard to develop the bvi and you all lazy people getting vex because they trying to save, so when you kick them out what they suppose to come home to? Ya’ll love use people.
Those can’t run they will have to stand god don’t like ugly
People leave their home country to earn money and feed their family at home , them not come here to feed IBH, IBH do same when they go USA UK
This is total rubbish. The expats have to pay exorbitant prices for food and water, cars and apartments so someone is taking our money here in the BVI.
Sad thing let the truth be told
@Wow and others who made similar comments, on the one hand I understand in a very small way what the politicians are saying. What I don’t understand is if the country is short of money why don’t they Scratch where the money is. In the 1960s when places like Little Dix Hotel was opened on Virgin Gorda by Mr Lawrence Rockefeller, later Peter Island Resort, Bitter End Resort and Biras Creek on Virgin Gorda, government decided to give those wealthy investors a Perpetual gift of “Pioneer Status” (Duty free importation of materials etc. and other deal sweeteners). It was suppose to be for ten years. Well add on another 2 or 3 rooms and the Freebies get renewed for another 10. If that isn’t sweet enough even the “Stamp Duty” (the tax payable to Land Registry when land is sold is For sometimes forgiven. Land Sales to expats was at 8% up until 4 or 5 years ago but was raised to 12%. Today with public infrastructure (boads, schools, new multi-million dollar clinic with only 3 beds, ghuts that flood the towns when it rains or more than an hour, Free scholarships paid for by Tax payers, +++ one would think that these Free Gifts to millionaires and billionaires would be ended; so we would be able to afford to Open and clinics (like the brand new clinic on VG, that was gloriously opened on the eve of the new government’s first year in office; but closed (and still closed) after the evening of its opening celebration. Over on the American side of the Virgin Islands, investors are offered similar and perpetual Freebies; including Duty-free; but only when goods and services are not available locally.
The argument that the tax is inly 7% cent makes it seem like pittance; but vision like that can be referred to as “Myopic or Blurred”. Government themselves complain about the ultra high cost of telephone and internet service. The high cost of imports, paid with unliveable $6.00 p/h wages can quickly wipe out minimum wage incomes.
It is understandable that taxes are necessary for adequately paying government’s obligation. But government is expected and responsible to spend Tax payers moneys wisely. With an operating budget of $339,000 and a populations of 30,000, something seems way out of whack. When a country purchases structures for $13-millions and it just sits and eventually crumble, continuously rents private buildings and offices rather than build, when every project government constructs runs into millions in over runs, when politicians become “Jetsetters” traveling without any tangible or abstract thing to return with or report about, politicians tend to take the easy way out; Sticking it to their humble taxpayers.
I understand about paying the taxes of the land that you live in, but my God right now when people can’t even buy food to eat. Single mothers have 2 children in college because BVI only provide associate degree. We have no choice but to send children abroad for education. You never had to make it at 7% you could at least start at 2% and over the years when things got better you increase it. What about those people right here that owes the Government millions of dollars already taken from our salary and when you apply for sick benefits you can’t get it because employers dont pay? Dont take such aggressive approach. You tell us to pray we are pleading to you to reconsider your amount to a lesser amount for now, no one can pay bills on $6.00 an hour. Please listen to the people. Show us the love of God.
The Premier mentioned the figure of 89 million dollars leaving the territory every year via the money services. By my reckoning that would mean in excess of 243 thousand dollars EVERY day. How is that possible? Let’s say an average of 1 thousand per person…. devide that by the two main money services… that would mean approximately 120 person at each one of the services EVERY day for 365 days…can you really believe a figure of 89 million dollars?
Fahie can’t count to 89 million. What’s leaving the BVI is the offshore companies. This tax is beyond ridiculous. You tax those that can least afford it. It’s the Belonger furthering their hold on the down islanders. First make them pay for a work permit held by a Belonger. Then the holder steals a third of the pay. Then the worker has to pay taxes and health insurance for which he gets nothing. Now another tax on his money to send to their families. IF THIS ISN’T PRESENT DAY SLAVERY THEN I DONT KNOW WHAT IS. THE BELONGER IS VERMIN THAT NEEDS TO BE ERADICATED.
The ones sending the monies out of Tortola are the ones who only wants to earn the “America Dollar Bills” to send “Down Island and or other Foreign Countries” , because it’s even more money in their Co9ntry. They never put/spend the monies back into the Tortola community.
VI is a natural resource-poor territory despite its boast of having one of highest standard of living, quality of life, per capita income ($34K) in the region and its approx $1B GDP and $414K Operations and Maintenance budget. Specifically, it has a dearth of natural resources, ie, minerals (oil….etc), forest, water, fertile land….etc, precious metals, and strategic metals to develop a primary economy or a secondary economy (manufacturing). Instead, its economy is service-based, ie, the twin pillars being tourism and financial services. Further, government, to deliver services, ie, public safety, health, education, roads, water, sewage, electricity, social services……etc raise revenue from taxes, fees, fines…..etc; it receives little to no grant-in-aid from the UK; it stopped receiving grant-in-aid from UK in the 1970s under the Dr. Williard Wheatley administration. Clearly, government has limited sources from which to raise revenue.
Moreover, the more often a dollar circulates in the economy the stronger the economy. In some communities, a dollar may circulate 5-7 times; however, in the VI, it may circulate at most 2 times. Further, keeping and spending money local creates a multiplier effect in the economy. Though it will be controversial, assessing a fee on remittances seems like a reasonable source from which to raise revenue to help in delivering basic services. Across the globe, remittance is huge.
“According to the World Bank, in 2018 overall global remittance grew 10% to US$689 billion, including US$528 billion to developing countries. Overall global remittance is expected to grow 3.7% to US$715 billion in 2019, including US$549 billion to developing nations (Wikipedia).” The leading recipients of remittances include India, China, Mexico, Philippines and Egypt. Latin American and the Caribbean region receives approx $85B; the US is lead country from which remittance flows. In developing countries, ie, most Anglophone Caribbean countries, remittances are a vital part of economy and figure significantly in their GDP. It is the economic life blood for these countries. Thousands of families in these countries rely on weekly or monthly remittances from families abroad. The VI too in the past depended on remittance, ie, St. Thomas ( just keeping it real).
In keeping real, the VI depends heavily on skilled and non-skilled expat labour; the majority of the workforce is expat. In fact the ratio of the population is approx 40:60 local to expat, respectively. All residents are demanding and using more services but have a disdain for paying more to deliver more services. Each resident must be willing to contribute his/her share to deliver services. Yes, the 7% or whatever the final number is will reduce the amount of money received by families. For example, for countries using the Eastern Caribbean(EC) dollar, a $500 remittance with the 7% fee will mean $465 received. This $35 reduction will equate to approx $94(EC), not an insignificant sum. Understand that some may reasonably debate that the taxes are already paid on money earned and may see this 7% fee as a double, triple or quadruple taxation. True. But all residents use, enjoy and expect the services government provides and should commensurately contribute. One can argue about the level and quality of service but that is another debate. Anticipate a vibrant, constructive, healthy counter debate on this issue. But it is all good.
Space out what you write even more.
Many people probably dont read what you write because it is discouraging to read walls of text in this font.
@Vibrant, Diaspora can speak for his-/herself but IMO Virgin Islanders dislike of reading even a short paragraph is why they are lagging others, resulting in the import of obs that Virgin Islanders should be capable of doing. There are few jobs that Virgin Islanders should not be qualified to do. Nonetheless, while they complain of not finding work others are gainfully employed.
Here is a news flash. Readers are leaders. We need to be encouraging locals to real more, not less. If they don’t read, the territory will always be importing labour. The VI must become a reading and learning nation if it wants to progress and be competitive in the global economy. Globalization is sweeping the globe; Virgin Islanders must get aboard that train or be left behind.
[Lets lead like eagles, not careen off the cliff like buffaloes.]
@Diaspora, you probably can afford the 7% fee on remittances. Many families depend on remittances from relatives abroad to get by. For example, a $200 remittance means $14 less for needy families. $14 may not mean much to you but it does to a needy family in DR, SVG, St. Lucia, PI, SKN, Antigua, Grenada, Guyana, Jamaica, Anguilla, Montserrat, Dominica and a myriad of other countries. Furthermore, the remittances have already been taxed, ie, social security, NHI…….etc; taxing (fee) it again is double taxation.
The taxes and fees paid contribute to education, health, infrastructure, social services…….etc. We contribute our fair share;This fee falls only on the shoulder of expats. It is taxation without representation. Our labor built and is carrying the territory. We are the lifeblood that support the territory. So keep exploring us. The BVI can ignore us at its own peril. Our memories are long like elephants’.
Who has the patience to read these long essay like comments without any real point?
@EU Citizen, you have the right to skip the comment as the commenter has his or her right posit an opinion. Other than to criticize, have not seen any articles written or other comments from you. Some of us forte is to criticize.
$35 can buy food for a week
Of course the territory needs to raise money in the current circumstances. But the pain should be borne by all, not just the poorest sections on society.
This DownIslander tax is not fair. How you treat people during this will be remembered.
Is not fair
We’re gonna have to sacrifice the wellbeing of the downislanders on this. bVIslanderstrong. #lookafteryourown. Sorry islanders. Bless
Its only 7%. Poor people that usually send as little as $50 will only pay a measly $3.50. People that are more well off that send as much as $500 are only paying an extra $35.00. Are y’all serious? Is this the unbearable amount that will force y’all to go hungry and homeless?
If you go to some Caribbean countries where the money is being sent you have to pay an education tax, consumption tax, Value added tax (VAT) on all goods and services that you buy in addition to the other basic taxes and they wont complain. The BVI dont have any of those taxes.
$89 million a year leaving the territory but the air pollution from the emissions from all them vehicles that you use remain which affects the health of all residents even beyond your stay in the VI.
7% is a small drop in the bucket to go towards education,fishing agriculture, elderly etc which will benefit everybody as well.
The expats pay more tax in this country than anyone else you looking at 7% alone saying only $35.00. ( Poor people) Rich person that $35.00 is their grocery money, money for their medication or their kids lunch money for the week.
They pay work permit.
Work permit card
$50.00 for work permit application.
$25.00 for time.
Money to bond their children here.
It all adds up and its a bill, also a deduction from their salary, mind you rent, food,internet, water etc has to be taken into consideration, maybe you’re an alien or lives with your mother so you have no idea what’s going on.
There’s always something you got to give up to get everything you want. News flash Everywhere in the world expats have more fees/requirements than the locals. That’s just something we all have to accept. It’s not unfair it’s the way things are. Foreigners in the USA have to pay over $450 to renew a green card to work. Jamaica $104.00 US for work permit. The 7% is 100% optional you never have to pay if you never send your money away. Nobody is forcing you to go MoneyGram or Western Union. If I go away I have to pay all the extra fees as an expat. It’s nothing to cry about. If it’s too much for me to bear I will come right back here but I wont complain and try to tell another man how to run his country.
Who can’t run they well have to stand
God no like ugly
So am guessing that this won’t pressure who is from here, it will pressure mostly people who came here to make a living who have family back home like me, oh I see…
Again….pressure on the expats…smh
God is watching how his people have been treated over the years,but only time will tell.hiding behind christianity.God did use pharoah and Rahab.this is Egypt pharoah sourit.is not every one say Lord is for him.
En bvi los que mantienen esta isla son los imigrantes con lo contratos que pagan las manos de obras que hacen en menor precio y aun haci los martratan y tambien se quieren aprovechar de esta situacion donde con el trabajo del imigrante los beneficiado es bvi
Belongers outta money, so hit the outsiders with another tax. Without expats, BVIs would be a backwater. No doubt slavery will make a resurgence: you know, bring in outsiders to do the skills we can’t be bothered to learn to do, pay them as little as possible, tax most of it, charge exorbitant prices for food and substandard housing, marginalize them socially, make sure they can never become legal residents, then tax what little they have left when they want to send it to their family. Meanwhile, how many belongers born in St.Thomas file annual tax returns with US govt. Don’t worry, one day, they’ll be ready to whisk you away when they scan your passport on your next shopping trip there. Karma can be a b**ch. As you sow, so shall you reap.
Well then that’s something they will have to deal with if the time come and nobody should complain because they were the ones that went out of their way to be a US Citizen.
In life everything isn’t going to go your way. Some of you are too ungrateful. Fahie took so much heat to give over 1500 people that were here for 20 years, residency and belongership and if he had his way those that were here for 15 years would have gotten it too. I know for sure he will lose some votes because of that but he did it anyway. There were some BVIslanders that hated it but the majority understood that it was the right thing to do.
Now because he taxing outgoing money the same ones that were praising him now want to kill him.
The tax affects everybody regardless of if you from here or not. Many BVIslanders are in relationships with expats and help support their family overseas. They too will have to pay the 7%. People from here have friends that are overseas that they help now and they will have to pay.
I honestly dont think the 7% is too much. People will always complain when there is a new fee that they have to pay and that’s understandable but the show must go on.
Basic economics teaches us that a man who earns $1 in salary always earns much more for the employer. So the businesses in the territory are already significantly benefitting from the labour of us islanders.
Our salaries are taxed and we pay health insurance. Further contributing to the VI state.
After taxes and NHI is paid, islanders pay rent, they purchase food, entertainment and utilities. The cost of living here is significant.
Usually what we have left over isn’t significant. But we make do through great sacrifice.
Now we are to face an additional 7% tax on the money we have left over simply because we use it to satisfy our overseas commitments.
How is this fair? Why not just implement a nationwide 2% increase in tax. No that would burden the local community. Instead it is easier to punish hard working expats with this tax/levy on our disposable income.
We are to be punished because we don’t invest the money in the Bvi? How can we invest in the Bvi? There are restrictions on us purchasibg property, owning and operating businesses. So we are expected to spend it all here and have nothing for retirement?
What I find quite amusing is that most of the money earned in the financial services is imported. These international businesses use money earned overseas to pay financial services fees. But the Government has an issue with islanders sending money out. Talk about having your cake and eating it as well. BRAVO!
My island people God is good and we will survive. Spend less money on entertainment cook your food and home. We endure many challenges here. We will endure this as well.
God’s blessings to everyone.
And don’t forget to practise social distancing.
What I can’t understand, help us to understand is why, do you prefer to take hardship here and not in your home country? I ask this because when I was in the US and saw it was heading downhill, I hightailed it back to the BVI and never looked back. I don’t even check for them. In my own home country BVI I am so much happier than being abroad. I prefer to take my challenges here because it is my home country that I enjoy help building. I love my home country and know that the US will never take care of me like my home country, so I didn’t fuss with their laws and policies. So help us to understand why you don’t feel the same and why you are not there helping the others to build your home country like the others? I am really trying to understand. Don’t you believe that your country needs you now more than ever?
That will be the next tax – on imported $.
@Mike, yes, for profit businesses are in biz to make a profit. However, they invest the capital and assume the risks. Everyone (both local and expat) that is employed pay social security, NHI, progressive employment tax….etc. Every locale has a myriad of taxes but everyone does not have to pay all taxes.
To all carbinet members,, would u do this to ur own people,remember do unto to others as u will hav them do unto you, one hand dont clap, and oh how u,all quickly we forget our irmer exprience thoes who help this country back on its feet again and to you are spiting in their faces , the truth remains tortolian dont change , but u just waite , histroy will repeat itself weather in your time or in another
Simply use online to send monies at your own comfort of your home
Interesting indeed. I knew this was coming. I have said already and I will say again. They can’t out smart a down islander as they call us. Open a bank account. Get a card. Send it back home. Put the money in the bank and let your people withdraw. You will even save western union fees and no tax. Let them take that. Western union will have to close. If you all pay that tax you really from down island in truth. Smt.
Please remit all the money collected from this new 7% fee to the US Treasury Department, Washington, DC, USA. Thank you BVI for collecting this fee on the US currency printed in the USA.
To interested: Good night. Certain things you don’t say online. Because it seems them want to milk us dry. Keep these things as secret.
If this was well taught out, I say not. Some persons will be paying double and triple taxes. By that I mean when you reach $ 10, 000 you are taxed %8 and if you have a part time job that’s is also 8% at the beginning of the year and onwards. People also have children away in school have you guys taught about that? I am totally disappointed especially in this hard guava crop time. You might get a few people paying this tax but remember there are many ways to skin a cat. I see more lost than gain if you ask me smh.
Does this fee include money that you transfer through your bank (ScotiaBank) via wire transfer?
Y’all could have waited till things go bk to normal to do this… trust me this is the worst timing to implement that 7% tax….