The 7% wire transfer tax is now in effect

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Western Union and MoneyGram are popular money transfer companies in BVI.

Controversial legislation requiring a seven percent tax to be levied on all funds leaving BVI through money transfer agencies has now come into force and aims to impose a fine on any agency that does not comply not.

A notice published in the official government gazette last Thursday said the Financing and Monetary Services (Amendment) Act became law on Monday, May 4.

The amended law stipulates that the seven percent tax collected must be paid to the Financial Services Commission (FSC) each month, unless the Commission directs otherwise.

Non-compliant agencies face penalties of up to $ 5,000

And if an agency fails to collect the seven percent tax or submit revenues to FSC on time, it may be subject to what is described as an “administrative penalty” by the Commission.

According to the Financial Services (Administrative Sanctions) Regulations, the sanction that would be imposed is punishable by a fine of up to $ 5,000.

The Administrative Sanctions Regulation, however, said the Commission can take “any other enforcement action” against non-compliant money transfer agencies, except to revoke an agency’s license to operate as a additional sanction for the same offense.

Money collected from all transactions will be deposited into a fund set aside for various national development initiatives.

During the debate on the amendment in the House of Assembly recently, Prime Minister Andrew Fahie said it was a very important development in the territory’s financial services.

He said he believes this is necessary when economies around the world are threatened by pandemics such as COVID-19.

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