Money transfer tax too high and bad for business! Residents sending less frequently in smaller amounts
By Esther Durand, BVI News Staff
Since the controversial Financing & Money Services (Amendment) Act became law on May 4, commercial activity in that sector has slowed significantly.
The legislative amendment mandates that a seven percent tax be taken from all monies leaving the BVI through money transfer agencies.
Meslyn Allan, who is the Marketing & Network Development Manager for GraceKennedy Money Services Ltd — the exclusive agent of Western Union in the BVI — told our news centre that persons are still sending “but are doing so less often and in smaller amounts”.
“Feedback from our Western Union customers suggest that they are not opposed to the tax. However, they believed the levy is too high and makes it very difficult for them to continue to transact business in the way that they are accustomed to,” Allan told BVI News in a recent interview.
Business was good before tax
She said data also indicated that business was ‘growing moderately’ before the coronavirus, “however, it has become further challenged by the implementation of the transaction levy”.
“Since it’s implementation, the business has and continues to see a significant reduction in transaction volumes when compared to the prior year,” Allan added.
Residents seeking out alternative means
An operating agent for another local money transfer agency, who spoke on the condition of anonymity, said traffic at her outlet has ‘definitely decreased’.
“People are finding other means, and I guess there is an underground market as well that is being established. They are using apps or banks because they just find the seven percent too expensive. So it is having a negative effect,” she told BVI News.
The money transfer agent said people regularly used the service before the introduction of the levy and “didn’t have a problem”.
“Business was brisk, very brisk. But it has dropped by at least a quarter, I would say if not more,” she stated.
She said her biggest fear is that persons will stop using the service altogether.
BVI News also reached out to other agents in the industry, however, they declined to comment out fear of being victimized.
Premier pleased with tax
Back in mid-June, less than two months after the tax amendment came into effect, Premier and Minister of Finance Andrew Fahie said government was seeing huge returns from the levy.
“The slowest week thus far was the second week in May, around there, and that week was $843,670.03. If you just take seven per cent out of that week, you have $59,056.90. With about 30 more weeks to go for that seven percent, you would calculate it to be $1,771,707.06,” he said while speaking in the House of Assembly on June 16.
Tax to benefit five sectors/programmes
Every dollar collected from the seven percent tax will be distributed among five local sectors and initiatives. Each of those areas will get 20 percent of the overall taxes collected.
These areas include programmes benefitting senior citizens, educational programmes, landbank and first-time homeowners, the fisheries sector, and the agriculture sector.
Copyright 2024 BVI News, Media Expressions Limited. All Rights Reserved. This material may not be published, broadcast, rewritten or distributed.
The VIP killed the goose that lays the golden eggs
No is not you island people complain about everything
Well you must be one of the black that stand on another black neck. Your statement make no sense.
Only “Island People” send money through WU and Gram??
People! Send your money online and avoid this unfair tax. The charge 7% for those who send a few hundred dollars to feed their family and not charge the elites who are sending millions out the country through the banks.
This is an unnecessary tax on the poor.
Agreed. Just use online services. Even a bank can do external,transfers online. No charges for that.
BVI grasping at anything to make money, except tax themselves. Make other people pay for a shrinking treasury. But wait let’s kick out all expats who don’t have a job. Great idea as they are the ones who,let us live our life of luxury as we don’t want to work. Sigh
It seems like you don’t realize that some of these people don’t have bank accounts..And for a transfer to be “free” both the sender and receiver need to have accounts in the same bank.
This is poor and bias reporting people. There are several factors that would cause business to slow. Many persons have lost their job. Many persons are stretching their dollar to help themself here and abroad. The coronavirus will cause an impact and such and such and such. Being a marketing manager doesn’t qualify that person to speak accurately on the matter. Just stop! The first thing is to point fingers at the government. Don’t be fooled by politricks. Not even the BVI reporter is qualified to post this nonsense without proper assessment. Stop!
Don’t worry the government keeps this up they will only become a 1 term government. Not to worry. A government with out no vision is always a 1 term government. Any government that oppress its people, never last long.
Not the vip that is one man doing trump twin, so plz dont blame the rest.it all lie on him. Myron would have done a wonderful covid job
Golden eggs but for who?
I hope people find other ways to send money to their families. Like all government, this one just want to take as much as they can from the hard working men and women. Why they didnt drop a 7% fee for the scooters that are up and down the place being a nuisance or drop a 7% penalty fee on drug and gun offenders ??
Leave the Tax…This Business Person only thinking about herself. Less money going out better for the Economy. You can’t force people to select your Establishment as their choice to transfer money. Sometimes it’s how you treat People will make them recurring Customers Period.
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Yes better for the economy
How is it better for the economy these people may not be using money gram and western union but day sure is sending money out to their familes. Its not like day keeping it and spending it here and once dat not using these places it means bvi not collecting no tax so how is it benifiting d economy im very glad this happen things just start to back fire in dis country much more will
every single person living in the bvi is contributing to the economy – buying food, paying rent, light, water, phone, gas etc. And this is money after payroll tax, nhi and ss.
It look like we forgetting we are all humans fighting to survive – there are ppl who has little to nothing and sacrifice daily so their kids can eat, their aging parents can eat, their child or sibling can have an education.
I sure when God call us he ain going say “island ppl” you go over there cause you lesser than, “americans” come up in front or “bvi ppl” I save a special spot for you.
Wake up and we want to talk about racism??
This is pure prejudicial behavior against our Caribbean brothers and sisters. Scraping for pennies from working class people who only are trying to feed their family, while over a Billion dollars leave through the banks annually.
This Government is going to break the backs of poor people and they especially seem to have a issue with our Caribbean brothers and sisters. From the transfer tax, to the need for good standing to renew permits. “De go Dead!”
If I use the services of these company, I also have to pay the 7%. It is not only our Caribbean brothers and sisters that use this service; so your comment is irrelevant.
Sorry did it again. So, i have to write and confirm my agreement with your position.
Maybe the amounts have decreased because nobody in the BVI is making enough to send as much home as they used to send!
Could also be because they don’t have the cash to send home. WU is a rib off anyway.
Them down island people don’t got no money but got to send home
Dats becaz we hav our priority straight we take care of our own at all cost we rather send our last dollar home instead of spend it here in a country where d people constantly finding reason to to belittle. Island people so u r rite we never hav to waste here but we do hav to send home
Becaz? Omg! Says it all!
@Smh
Thank you for confirming what most of us have been saying about some of you for a long time. Rather send home every penny and begging up and down. If you really had your priority straight, you would not be at FSN and Red Cross bleeding them for your daily survival. Continue with it, it will come to and end soon.
By the way, do you and your likes realize that it’s the same local and elites that you all call down are the ones that support such organizations? As I say, continue on.
Business at these places is slow because business EVERYWHERE is slow! People are working reduced hours and shifts. Others getting half salary or less.
So if they aren’t earning money then they cant send money home can they?
So the problem with your reduced business is less about the new tax structure and more about the economical climate. Put things in to the proper perspective.
You would be surprised. Money is moving, it just wont be taxed. There is more than one way to skin a cat. I bet the Premier’s projections on the tax to be collected will be lower than he expected. He would make way more off of the bank wire transfer and I cant help but wonder why he hasn’t gone to rape those people as well.
You will be surprised. The underground is thriving, money is being sent, a lot of money and not through the money service businesses, it is a fact.
Who is surprised at this? The underground will flourish and the government will have killed businesses and still barely collect anything in taxes.
This government is playing reverse robin hood.
They take from the poor with this tax and give to the rich with their stimulus: tax break for home transfers.
They take from the poor with the good standing certificates. They give to the rich by not enforcing them to pay up to SSC and NHI.
VIP, reverse robin hood!
B I N G O
Really business is slow, government has made over $1million long ago thats nearly $15 million sent out the country already………
What happened to the old fashioned way to transfer money free through apps like PayPal, venmo?
Nobody complaining about the ridiculous fees that Western Union were already charging? Fix this problem once and for all – buy Bitcoin – move you money TODAY for tiny fees.
Just use paypal or wiretransfer. Government is a scam
They not working…wait for covid19 season over and businesses pick up…
How is it better for the economy these people may not be using money gram and western union but day sure is sending money out to their familes. Its not like day keeping it and spending it here and once dat not using these places it means bvi not collecting no tax so how is it benifiting d economy im very glad this happen things just start to back fire in dis country much more will
Shut up u low class b*****d and go back home then… you too dumb to realized is everyone getting squeezed by this tax.. BVI lander or not… dumb fool
So high class how you so bright no man you too much
No remember western union and money gram is only for down Island. Then you are from down Island?
I wonder y they are complaining about island people ?not sending much money you can’t be serious.you think we stupid nah.as for me I find ways to send my money that I work for.
for my family’s every 15 and the end of every month I for sure will not pay no 7% so too bad I have other ways and means to do that thank you all a wise man built his house on a rock not on sand.
This VIP government is a scam. Uncle Ralph turning in his grave right now.
if not for this tax that was imposed i would not have discovered and find a mean to this very beautiful app for sending money to my home.. for 500$ i am only charge by 6-7$… imagine me and some of 40+ guys now using this..and probaly more
40+ guys could still be lining up in western union or moneygram now. but now because of this big taxed imposed,ways have changed and we could send money anytime anywhere now..
A 2% or 3% tax would seem more reasonable. But because of Government’s greed these services will go under. Oh well
The reduction in traffic could be primarily due to the overall economic slump caused by the covid-19 crisis. No doubt about that.
However what you find in an economic slump and a potential recession is that people not only have less disposable income, so what they do have they are pretty careful in how they spend it. If they can save 7% they will.
Taxing the lower income earners with a pending recession is not a good idea. Those persons tend to be the ones who loyally patronize the small businesses and as a result indirectly fuel the economy.
Oh well.
I have been using the app to send up to $1,000USD with my bank card and all I paid was $3.99 with western union and $2.99 with MoneyGram so for who have money to give away go in the line but for me as a single mother I can’t afford that 7% tax these government officials will learn the hard way.
While am here let me say when u allow employees to pay the price as a result of the employers not paying any one NHI and SSB payment and send them back to their countries this will be the outcome loads of empty apartment will be sitting there and people who depend on down island people rent to pay their mortgage that will be no more and if they are not working to pay back the bank for monies BVI Islanders borrow the bank will go with all they work hard and invested in.
I am wondering if our elected officials put that into consideration because won’t always will be able too give them a break at all just my thoughts.
For all you who say, they are not spending their money here is a lie. The money these ppl are sending out to their families are far less than what these ppl spend here throughout the year. Remember these ppl have to pay high rent, buy food/groceries, clothes, pay to renew work permit, SSS,etc. They probably spending more money than us locals a year, now for them to have to pay such a high tax + WU fee to feed their family abroad, it’s crazy and tough on them. I agree with a tax helping the country but it should be reduced to no more than 4%
2% is good that’s what the Cayman islands takes
I do not understand why some people quietly leave their home country without any fuss for what ever reason but come to a next man country making demands, and feel they can bully everbody even the government.
When I send my money out of the country by shopping online, I usually have to pay a tax (higher than 7%) to get my order released from Customs. Should I consider that unfair as well??
Do you really think that it’s a fair comparison to compare online shopping for a ‘want’ to someone sending money to their family to satisfy a ‘need’? Do you really think the tax on both these things should be the same? The last time I checked you could not eat clothes or shoes or whatever else you think you couldn’t live without, but try going without money to buy food or pay your bills and let us know how far you get! You should have named yourself Clueless!!!
I think Some good common senses is really what needed to be tranfer to us here in the bvi from the top down because we just fighting and killing each other.
I reside out of the BVI, and an avid reader of news around the world. It is so disgusting to see how many BV Islanders speak so badly of the foreigners that work so hard to teach your children, treat you in the hospitals, among other jobs..In this pandemic, it is so sad that people will have so much hate and bitterness in their hearts..Remember, the BVI is very small,and help others others on your way up, because you will certainly need their help on your way down..
Strange that you only address what the BVIslanders said but not what the expats are saying It takes two to tangle. Trust me the expats are more critical of the locals than the locals are of the expats. Every country have laws and expats hate to abide by BVI laws. Some expats want to change BVI laws to facilitate themselves.
The expats are critical of the locals because the locals started it in the first place..Every article or issue there is, the locals talk about down and up islanders..Trust me, based on what I have been following up over the years in BVI, you guys do not treat expats nice, although they work very hard for what they need..There are some islands and countries that expats can live and they are never bothered..I always say that what you do in life, comes back ten times at you, whether it is in a good or bad way..I can attach articles upon articles to show what I am saying..He who has ears, let them hear..
The heart of man is desperately wicked, dnd unjust and what comes out of our mouth defiles our body.
Muy abusador el gobierno subir ese impuesto en medio de covi19 es muy inhumano de su parte y muy egoista por que quieren quedarse con todo el dinero en impuesto
Es muy inhumano el gobierno al subir lo impuesto en medio de la pandemia sabiendo como esta la situacion en la isla que ni trabajo hay eso se llama egoismo
I have tax already deducted every paycheck, and tax again every time I will send money wow it’s radiculous, it’s too high for 7 too high too high and 6 $ minimum per hour wat a poor eh???