The Mexican Chamber of Deputies is set to propose a resolution on March 25 urging the federal government to protest a remittance tax by the US state of Oklahoma. In 2009, Oklahoma put a $5 tax on each remittance transaction or wire transfer, plus an added 1% charge on amounts over $500. Another state, Kansas, recently considered passing a similar law. Mexican nationals abroad (predominantly in the US) sent over $21 billion in remittances to Mexico in 2009. According to BusinessWeek, these remittances are Mexico’s second largest source of foreign income.
The Congressional resolution calls for more than just a diplomatic objection by the Minister of Foreign Relations; it urges the federal government to stop all governmental purchases of products made in Oklahoma until the law is repealed. The chairman of the Economy Committee, Ildefonso Guajardo Villarreal, said that the $5 tax is equivalent to three kilos of eggs, seven kilos of tortillas, or two kilos of beans that could be bought by a recipient family in Mexico. The representative called the measure blatantly discriminatory and said it was clearly meant to target the Mexican migrant and undocumented populations.
The tax on remittances was included in an Oklahoma law, “The Drug Money Laundering and Wire Transmitter Act” (HB 2250), proposed last June under the argument that the money would go to a fund for fighting against drug traffickers in the state and that the tax would hinder the financial operations of traffickers who use money orders. However, Deputy Guajardo Villarreal rejected this association and said that the law was clearly motivated by immigration issues.
Sources:
Associated Press. “Mexico’s remittances continue to fall.” BusinessWeek. March 1, 2010.
Otero, Silvia. “‘Indigna’ impuesto a remesas.” El Universal. Marzo 25, 2010.
More power to Oklahoma! I think that it’s unfair as well, to the U.S. The charges don’t even come close to compensating for the costs that Americans are paying for illegals that don’t pay income taxes, use hospital services that they don’t pay for, etc. Maybe instead of criticizing the U.S., Mexico should get its act together so that its citizens can make a decent living inside Mexico’s borders.