Well we should remember that the guy who said “that’s where the money is” was actually a bank robber! 😂 So using that as the guiding taxation principle probably isn’t ideal.
Taxing incoming remittances specifically would actually be rather tricky as they could be hard to distinguish from just normal business transactions like revenues from export sales. But a number of governments across sub-Saharan Africa have a version of this type of tax already; the increasingly popular levy on transactions made by mobile money. Another key pinch point where governments know money is being exchanged. But the evidence so far seems to suggest they raise modest revenue while risking financial inclusion, digitalisation, and small-business formalisation as people revert to cash to get around paying the levy. Easy to administer; for sure. An ideal tax arrangement; not so much.
Super interesting! What's your thoughts on taxing remittances? Clearly it's logistically really hard to do and would hardly be a vote winner but it seems like "it's where the money is" and will increasingly be, especially as richer, aging countries start clamoring for younger workers. A low tax on remittances could generate huge windfalls and potentially offset removal of tariffs.
Well we should remember that the guy who said “that’s where the money is” was actually a bank robber! 😂 So using that as the guiding taxation principle probably isn’t ideal.
Taxing incoming remittances specifically would actually be rather tricky as they could be hard to distinguish from just normal business transactions like revenues from export sales. But a number of governments across sub-Saharan Africa have a version of this type of tax already; the increasingly popular levy on transactions made by mobile money. Another key pinch point where governments know money is being exchanged. But the evidence so far seems to suggest they raise modest revenue while risking financial inclusion, digitalisation, and small-business formalisation as people revert to cash to get around paying the levy. Easy to administer; for sure. An ideal tax arrangement; not so much.
Super interesting! What's your thoughts on taxing remittances? Clearly it's logistically really hard to do and would hardly be a vote winner but it seems like "it's where the money is" and will increasingly be, especially as richer, aging countries start clamoring for younger workers. A low tax on remittances could generate huge windfalls and potentially offset removal of tariffs.