The Financing and Money Services Act 2020, which passed unanimously Friday in the House of Assembly, imposes a seven percent tax on funds sent outside the territory via money services companies.
A lengthy debate, however, centred on the timing of the bill and whether it was right to place an additional financial burden on working people in Virgin Islands who may be struggling to support loved ones abroad.
But Premier Andrew Fahie defended the legislation, explaining that the revenue collected would be split evenly for senior services, education, fishing, farming, and first-time homeowners — and would be deposited into a fund earmarked for those purposes.
But Opposition Leader Marlon Penn (R-D8) questioned the wisdom of bringing the legislation forward now — as some workers in the territory reel from underemployment and layoffs caused by the Covid-19 pandemic — and raised concerns about placing an additional financial burden on “the lower end of the spectrum.”
Mr. Penn said he didn’t discount the need to raise revenue for important sectors, but he advised the government to focus instead on “trimming the fat” out of the budget and brainstorming“new industries and new ideas” instead of raising new taxes.
“Putting the tax — and essentially that’s what it is: a tax on our working-class people — is not going to fix the systemic problems,” he said. “Our efforts are better put if we address those inefficiencies.”
Opposition member Mitch Turnbull (R-D2) said that levying an additional tax on monies that he claimed have essentially already been taxed — for Social Security and National Health Insurance, not to mention the fees charged by services such as MoneyGram — would be burdensome.
Factoring in the other fees, he said, “We are looking at persons that would be sending monies out of this country having a tax of 27.75 percent.”
But proponents, including Natural Resources, Labour and Immigration Minister Vincent Wheatley (R-D9), countered by saying that according to his calculations remittances sent from the VI equal about $89 million per year, indicating that those sending money abroad are not “poor.”
Mr. Fahie agreed, chiding the opposition for turning the debate into one about “rich and poor,” and criticised those who opposed last year’s “fast-track” belongership initiative for what he described as flip-flopping to now support the needs of foreign-born residents.
“All the same people that were angry then are telling us we are taking advantage of them right now again; they didn’t look out for them then,” he said.
He added that the bill is important because the money would go to support oft-neglected sectors of the territory, such as children and seniors, who he called “golden gems.”
“We really feel we can help certain entities in the Virgin Islands that have been ignored over the years,” he said. “I searched my soul and said yes, I can live with it.”
The law now awaits assent from Governor Gus Jaspert.