Money transfer tax too high and bad for business! Residents send less frequently in smaller quantities

0

By Esther Durand, BVI press team

Since the controversial Money Finance and Services (Amendment) Law came into effect on May 4, business activity in this sector has slowed down considerably.

The legislative amendment requires that a seven percent tax be levied on all funds leaving BVI through money transfer agencies.

Meslyn Allan, Marketing and Network Development Manager for GraceKennedy Money Services Ltd – Western Union’s sole agent in BVI – told our press center that people still send “but do it less often and in smaller amounts. “.

“Feedback from our Western Union customers suggests they are not opposed to the tax. However, they believed that the tax was too high and that it was very difficult for them to continue doing business as usual, ”Allan told BVI News in a recent interview.

Business was good before tax

She said the data also indicated that business was “growing moderately” before the coronavirus, “however, it is even more challenged by the implementation of the transaction tax.”

“Since its implementation, the company has and continues to see a significant reduction in transaction volumes compared to the previous year,” added Allan.

Residents looking for alternative means

An operating agent from another local money transfer agency, who spoke on condition of anonymity, said traffic at his outlet had “definitely declined”.

“People are finding other ways, and I guess there is also an underground market that is developing. They use apps or banks because they find the seven percent too expensive. So it has a negative effect, ”she told BVI News.

The money transfer agent said people used the service regularly before the tax was introduced and “had no problem.”

“Business was going well, very quickly. But it’s down by at least a quarter, I would say if not more, ”she said.

She said her biggest fear was that people would stop using the service altogether.

BVI News has contacted other industry agents as well, but they declined to comment for fear of victimization.

Prime Minister happy with tax

In mid-June, less than two months after the tax change took effect, Prime Minister and Finance Minister Andrew Fahie said the government was reaping huge benefits from the tax.

“The slowest week so far was the second week of May, roughly over there, and that week was $ 843,670.03. If you only take seven percent this week, you have $ 59,056.90. With about 30 more weeks for that seven percent, you would calculate it at $ 1,771,707.06, ”he said in a speech to the House of Assembly on June 16.

Tax for the benefit of five sectors / programs

Every dollar raised through the seven percent tax will be distributed among five local sectors and initiatives. Each of these zones will get 20 percent of all taxes collected.

These areas include programs for the elderly, educational programs, land reserves and new owners, the fishing sector and the agricultural sector.

Copyright 2021 BVI News, Media Expressions Limited. All rights reserved. This material may not be published, broadcast, rewritten or distributed.

Share.

Comments are closed.