“How can I bring the money from my savings into my home country without paying so much tax on the transfer?”
A Latino immigrant asks a bank advisor, who patiently and professionally explains the topic of remittances or foreign currency transfers sent electronically from one country to another—an operation that varies in requirements and costs depending on the sending and receiving countries.
While many immigrants already understand from social media that upon arriving here, they must make more sacrifices than expected to start earning in dollars, others still believe it’s easier and that money can flow immediately and even be sent in an envelope to their home country.
One thing that has become clear with the migration crisis and the arrival of new migrants under any status is the increase in remittances.
For decades, the United States has been the leading sender of remittances to Latin America.
Sending money abroad through electronic transfers contributes 2.5% of the region’s Gross Domestic Product, according to reports from the Inter-American Development Bank.
These remittances represent an important indicator of economic dynamics not only in the U.S. but also in the countries where immigrants send money to their families.
In many countries, the level of remittances received exceeds foreign direct investment, benefiting millions of families who have no other means of survival.
Last year, electronic money transfers to Latin America surpassed $160 billion.
Forecasts for this year indicate that money transfers will continue to rise despite the government’s failed attempts to control migration and the varying tax implications depending on the state or country from which the money is sent, the purpose, the destination country, the amount, and whether it is sent to an individual or a commercial entity.
The ongoing increase in migration also means a growing population, more money being sent, and the emergence of new remittance senders.
That is why many states, including Florida, had proposed imposing a tax on remittances.
With the argument of discouraging irregular migration and money transfers by increasing transaction costs, this initiative did not succeed and appears to have been postponed for now.
While political and regulatory changes do not seem to greatly affect remittance flows, migration control policies and restrictions preventing migrants from quickly accessing the labor market could impact their growth and pose a challenge for Latin American economies.
Experts emphasize the need to increasingly ease restrictions rather than tighten them.
This issue, in addition to being important, generates many differences and must be handled with caution, as flexibility without regulation can pose risks for irregular money flows.
It will always be better and safer to transfer money from one place to another while complying with all existing regulations.
By Omaira Martínez Cardona – Colombian Journalist
oma66co@gmail.com
Image: Fortuna
