US-based Guyanese sending $$ back home may have to pay 2% tax …to help fund Trump’s border wall

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Guyanese and other Caribbean nationals residing in the United States of America who send remittances to family and friends back in their home countries could soon find themselves contributing to the cost of the construction of the Mexican border wall — a key commitment of US President Donald Trump’s 2016 campaign.

According to a report in the Jamaican Observer, a United States congressman is proposing that an amendment be made to the US Electronic Fund Transfer Act to impose a fee for remittance transfers to certain foreign countries.

Representative, Mike Rogers, of Alabama’s 3rd Congressional District that includes Auburn, introduced HR 1813, titled Border Wall Funding Act of 2017 in the U.S. House of Representatives on Thursday, March 30 2017.

The bill allows for a two per cent fee charged on individuals sending money to recipients in 42 countries in Latin America and the Caribbean.

According to the bill, the remittance fees would be submitted to the US Treasury to be expended for the purpose of building President Donald Trump’s proposed wall along the US-Mexico border.

“A remittance transfer provider shall collect from the sender of such remittance transfer a remittance fee equal to two per cent of the United States dollar amount to be transferred (excluding any fees or other charges imposed by the remittance transfer provider),” the bill read.

It listed a penalty of not more than US$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; for people found guilty of evading the transaction fee.

Since February, similar legislation has been introduced to the US House of Representatives under the Border Wall Funding Act of 2017 seeking ways to fund President Trump’s proposed wall.

The most recent such bill was introduced by Senator Ted Cruz of Texas to allow the use of assets seized from Mexican drug lords, like Joaquin “El Chapo” Guzman. The US government is seeking US$14 billion from the drug lord as part of its prosecution of Guzman, which could go to cover the estimated US$12-billion security feature proposed by Donald Trump.

If passed, the bill could have a heavy impact on remittance inflow to Latin America and the Caribbean.

It is estimated by Pew Research that Jamaica received US$2.338 billion in global remittances in 2015, with US$1.669 billion of that coming directly from the US, and another US$500 million from Canada and the United Kingdom.

The largest destination for remittances from the US is Mexico, which Pew Research estimates was equal to US$24 billion in 2015.

A two per cent tax is estimated to net more than US$2 billion a year if it applied to all money regardless of who’s sending it.

Other options the US is looking at in generating funds from Mexicans to build the wall include raising tariffs on imports, levying a “border adjustment” tax and increasing travel visa and border crossing fees.

 

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