Diaspora spokesperson not expecting significant fallout from US remittance tax

 

The one per cent excise tax on remittances sent from the United States takes effect on Thursday, but Managing Director of New York-based Caribbean Immigrant Services, Irwine Clare is not anticipating a significant impact on inflows into Jamaica.

 

The one per cent tax, set out in the 'Big Beautiful Bill' passed by the US Congress in July, will not apply to remittance transfers made via bank accounts or money transfers using US-issued debit or credit cards.

 

Mr. Clare says he does not believe that the tax will cause Jamaicans in the diaspora to curtail the money they will send to their relatives. 

 

"Jamaicans in the diaspora have commitments and obligations to family members here in Jamaica. We've always come through on that. The diaspora always comes through. Will there be some shortfalls? Probably. But in the long term, I think more and more ways, sophisticated and legitimate ways of remitting funds to Jamaica could be had. The remittance companies probably have to eat some of these charges or share it with the sender. But at a 1%, I don't think it's a major stretch at the moment. But we must also prepare ourselves for potential economic downturn in the United States if jobs become less for the sender, then the sender will have less to send," he reasoned.

 

Still, Mr. Clare, who speaking on the Morning Agenda on Power 106, said the sentiment among Jamaicans is for their relatives to use the remittances wisely. 

 

"What I hear from persons in the diaspora to their loved ones and families here in Jamaica is to be prudent in the spending of the funds they send home. Make sure that it is going to extra mile and there's a saving compartment to it because people in the diaspora are not picking up money off the street. They're working darn hard for this. And so sacrifices have to be universal in this situation because the sacrifice on the sender, we understand sacrifice also has to be made on the receiver. I believe though...that it won't be a significant impact on the inflows," he reiterated.

 

Finance Minister Fayval Williams has also said that while the government is still studying the possible effects of the new tax, she does not believe that it will result in any significant fallout.