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WASHINGTON— Proposals to tax money transfers from the U.S. to other countries won’t stop the terrorist funding sent through informal channels, experts warned a House terrorism subcommittee on Tuesday.

Late last month, Rep. Mike Rogers (R-Ala.) proposed legislation that would tax remittances primarily to Latin American nations to prevent undocumented immigrants from sending money to those countries — and those revenues would help build a border wall. Now, the House Subcommittee on Terrorism and Illicit Financing is considering the idea of imposing a similar 2 percent fee on money transfers to any country to clamp down on terrorism.

John Cassara, representing the Center of Sanctions and Illicit Finance at the Foundation for the Defense of Democracies, said “hawaladars,” the brokers who conduct the transactions, often are cooperating with ISIS.

But several members of the subcommittee said remittances — both formal and informal ones like those through hawalas — generally keep families connected overseas, helping foreigners send money to relatives in their home countries.

“These transfers can help stabilize an individual’s household,” said Rep. Tom Emmer (R-Minn.).

“In 2015, worldwide remittance flows are estimated to have exceeded $601 billion,” according to the World Bank’s Migration and Remittances Factbook 2016. “Of that amount, developing countries are estimated to receive about $441 billion, nearly three times the amount of official development assistance.”

Matthew Oppenheimer, CEO of Remitly, Inc. an independent U.S.-based digital remittance company, said that his customers send money for basic needs of their family members, “things we take for granted here.”

He specifically cautioned the Congress members against taxing remittances. “When remittances are sent from modern and legitimate channels, they strengthen national security,” he said. “Taxing means money will flow to underground channels.”

The top 10 remittance recipient countries in 2015 were India, China, the Philippines, Mexico, France, Nigeria, Egypt, Pakistan, Germany and Bangladesh, according to the World Bank. None of those are countries listed in President Donald Trump’s executive order baring citizens of certain countries from entering the U.S.

“Taxing would be a shame for both customers, because it would effectively double the cost of hard-earned money,” said Oppenheimer. “And it would be bad for our national security, because higher cost would drive more remittances to be send underground where they wouldn’t be able to be tracked or traced.”

Misha Euceph is a Pakistani-American radio maker. She is the creator of Beginner, a podcast about learning to belong as an immigrant in America. Beginner has been featured as one of Spotify's "Buzzworthy Podcasts," on NPR and in The Guardian. Misha's byline has appeared on NPR stations and in the Wall Street Journal.

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