India leads in remittances - but Trump's tax could deal a blow
A study by Center for Global Development, a Washington-based think tank, suggests the proposed tax could sharply cut formal transfers, with Mexico facing the biggest hit - over $2.6bn annually. Other major losers include India, China, Vietnam and several Latin American nations like Guatemala, the Dominican Republic and El Salvador.
To be sure, there's still some confusion surrounding the tax, and final approval is pending Senate action and the President's signature.
"The tax applies to all non-citizens and even embassy and UN/World Bank staff. But those who pay taxes can claim a tax credit. Thus, the remittance tax would apply only to those migrants who do not pay taxes. That would mostly include unauthorised migrants (and diplomats)," Dilip Ratha, the World Bank lead economist for migration and remittances, told the BBC.
Dr Ratha wrote in a note on LinkedIn that migrants would try to cut remittance costs by turning to informal methods - hand-carrying cash, sending money through friends, couriers, bus drivers or airline staff, arranging local currency payouts via friends in the US, or using hawala, hundi and cryptocurrencies.
"Will the proposed tax deter unauthorised immigration to the US? Will it encourage unauthorised migrants to return home?" wonders Dr Ratha.
Not quite, he says. A minimum wage job in the US earns over $24,000 a year - roughly four to 30 times more than in many developing countries. Migrants typically send home between $1,800 and $48,000 annually, estimates Dr Ratha.
"A 3.5% tax is unlikely to deter these remittances. After all the main motivation for migration - migrants trying to cross oceans and rivers and mountains - is to send money home to help helpless family members."
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Telegraph
an hour ago
- Telegraph
No more leprechaun economics: Ireland's tax swindle is finally ending
Donald Trump has sent Ireland to the naughty step. Once the altar boy of American commerce, Dublin now finds itself blacklisted alongside China, Germany and Vietnam, each a prime candidate for tariffs and sanctions. The offence? Running a surplus with the United States. On the face of it, the complaint seems petty. One country sells more than it buys. So what? But Ireland's problem, like the others on Trump's list, is that its surplus rests on a creed that has fallen out of favour. As offshoring hollowed out Middle America, the old Clinton mantra 'It's the economy, stupid' has begun to sound rather less clever than it once did. That, at least, is the mood in Trump's Washington. And judging by his campaign-trail fixation with the word tariff, many Americans agree: a reckoning is overdue. Ireland offers a particularly inviting target. Its surplus owes less to tangible exports than to tax gymnastics. A pill is made in Ireland for 50 cents, sold to a sister company (also in Ireland) for €10, and then shipped to the global market at the same price. The profit is booked in Dublin, while tax collectors elsewhere are left out of pocket. The trick doesn't stop there. Intellectual property is shifted to Irish subsidiaries, global sales are routed through Irish entities, and profits vanish into low or no-tax jurisdictions. Together, these sleights of hand form what we're invited to call the Irish economic miracle – a miracle that, by one estimate, deprives other countries of nearly $20 billion a year in tax revenue. The question being asked in Washington is: who benefits? Ireland, clearly. One in every eight euros of its tax revenue now comes from US firms. That's a fivefold increase since 2010, driven by Ireland's famously 'competitive' tax regime. It accounts for a large slice of a €150 billion bilateral surplus. When Irish Taoiseach Micheál Martin visited the Oval Office in March, Trump put it plainly: 'We do have a massive deficit with Ireland, because Ireland was very smart. They took our pharmaceutical companies away.' It's hard to argue with the logic. Ireland has been undeniably clever at attracting American capital. Spending it is another matter. Much of the money sits on Irish books without generating the economic activity one might expect. The state's coffers may be overflowing, but the windfall is narrowly concentrated. Public spending, as ever, has been handled with something shy of brilliance. From roads and hospitals to housing and energy, the services most visible to the public have seen little improvement, despite years of surging revenues. Meanwhile, resources have been channelled into more headline-friendly ventures: a €350,000 bike shed outside parliament; a vast new hospital project already among Europe's most expensive; and billions annually to accommodate asylum applicants – most of whom, the government has conceded, are economic migrants. The miracle, it seems, left little room for prudence. As every lottery winner learns, easy money tends to breed excess. But with full coffers, Ireland could afford to paper over the cracks. Meanwhile, American tech and pharma giants have flourished. Apple, Microsoft, Pfizer and others have routed billions through Ireland, to the delight of shareholders and pension funds. If Trump moves to close loopholes or impose tariffs, these are the interests he'll have to console ahead of the midterms. The losers, predictably, are the American workers left behind by the long, slow flight of industry and tax revenue. Worse off still are the countries quietly drained by Ireland's magic act. The sums involved are vast. The structures that move them are so complex they can feel impossibly abstract. But the consequences are not. According to modelling by the Universities of St Andrews and Leicester, this tax loss has deprived more than 100,000 children of school attendance and some 1.1 million people of access to basic sanitation. Quibble with the methods if you like, but the core truth is hard to deny: when profits are rerouted, people are short-changed. Not that Dublin seems overly troubled. Only last month, Ireland's Taoiseach declared: 'Ireland earns its living from an open and fair approach to world trade.' The most pious nations often turn out to be the most artful. Ireland rarely misses a chance to sermonise on Gaza, climate justice, or whichever cause currently allows it to cast itself as Europe's moral compass. But as La Rochefoucauld noted, hypocrisy is the tribute vice pays to virtue. And by that measure, Ireland has paid handsomely.
The Sun
4 hours ago
- The Sun
I jetted to China to furnish my UK house – for £1k I got a king-sized bed, mattress, tables, chairs and MORE
A YOUNG woman has jetted off to China to furnish her UK house. Shirley Bekker took to social media to share her experience, leaving people stunned by just how affordable it was. 2 She decided to spend six days in Foshan, China, to find furniture for her new house. And it seems to have worked in her favour; not only does she cut out the middleman by going to the manufacturers directly, but she was also able to get her furniture customised to her liking. Shirley spent the day looking for furniture for her bedroom and managed to kit it out for just £1,000. First, she looked for the ideal mattress to take home along with a bedframe. She ended up finding both and was able to customise the colour of the bedframe. In total, the two pieces cost her just £350. Next, she spotted a large chair and foot stool for her bedroom to match her new bed frame. "Shirley almost choked on her own saliva when the man said £185 for the set. But she quickly calmed down," the video read. "After reverse search imaging the chair, it revealed that the chair alone costs thousands of pounds in the UK. Eventually, she shook hands at £165." Next, she found a dressing table and chair that she was also able to customise for £170. Shoppers urged 'not to blink' and get their hands on Home Bargains garden essential that sold out fast last time and it makes your garden extra cute - TikTok homebargainsofficialuk While she was meant to be shopping for her bedroom, Shirley got distracted with the outside furniture and picked up an egg chair for just £45. She also bought a table and chair set for outside as well as a TV stand. "I spent £1000 today and managed to buy: king-sized custom bed, perfect mattress for my back, egg chair, Bistro table and chair, TV table, 6 handmade ceramic pots, dressing mirror, Japanese style chair and pouffe," added Shirley. The clip went viral on her TikTok account @ shirley_bekker with 319k views and 47k likes. People were quick to share their thoughts and were eager to try it for themselves. One person wrote: "Ok I've seen enough… anyone wanna go China and go halves on a shipping container to the UK???" Another commented: 'How much to ship to the UK? Cos I'm gonna need to book a flight to China." "Oh so we're being ripped off real bad here in the UK," penned a third. Meanwhile a fourth said: "This is crazy. I might make a trip too." "I have never been so influenced to go to China,' claimed a fifth. Someone else added: '£350 for the whole bed is insane."
Reuters
6 hours ago
- Reuters
UK and India discuss 'counter-terrorism' cooperation after Pakistan ceasefire
NEW DELHI, June 7 (Reuters) - Britain and India on Saturday discussed expanding their "counter-terrorism" collaboration following recent fighting between India and Pakistan, Britain's foreign minister told Reuters after meeting Indian Prime Minister Narendra Modi. British foreign minister David Lammy is the highest-profile Western official to have visited both New Delhi and Islamabad since the South Asian neighbours agreed to a ceasefire last month after their worst fighting in nearly three decades. The latest tensions began in April after the killing of 26 men in Indian Kashmir that New Delhi blamed on "terrorists" backed by Pakistan, a charge Islamabad denied. India then attacked what it called "terrorist infrastructure" in Pakistan, leading to escalation from both sides until a May 10 ceasefire. "We want the situation to be maintained, but of course we recognise fragility, particularly in the backdrop of terrorism, terrorism designed to destabilise India," Lammy said in an interview at the residence of the British High Commissioner in New Delhi. "We are keen to continue to work with our Indian partners on counter-terrorism measures." He said he discussed the next steps with both Modi and Indian Foreign Minister S. Jaishankar, but gave no specifics. Last year, India and Britain discussed, opens new tab combating the financing of terrorism, cooperation between law enforcement and judicial bodies and information sharing. Lammy said he also discussed boosting trade between the world's fifth and sixth largest economies. The countries concluded talks for a free trade deal early last month. "I know that Prime Minister Keir Starmer is very much looking forward to coming to India very soon to sign the free trade agreement," Lammy said. "There is so much that our two nations can continue to do together."
