According to statistics, the United States now ranks second after Saudi Arabia as a source of remittances to Bangladesh. However, a new regulation introduced at the beginning of this year has caused concern among Bangladeshi expatriates in the US.
Under the new rule, sending money through cash or cheque will incur an additional 1 percent tax. In contrast, remittances sent through digital channels will remain tax-free. Transfers made via bank accounts, debit cards, or mobile applications will not be subject to the extra tax. Moreover, remittances sent through formal banking channels will continue to receive a 2.5 percent incentive from Bangladesh Bank.
Economists believe that this tax is unlikely to have a significant impact on the overall flow of remittances. Dr. Zahidi Sattar, Chairman of the Policy Research Institute (PRI), noted that a large volume of remittances flows out of the United States. He said that while the 1 percent tax—introduced to increase revenue—does have a minor negative impact, it will not reduce the remittances coming to Bangladesh.
Experts caution that expatriates who are unaware of the new rules may unintentionally face extra costs by using incorrect transfer methods. They advise avoiding illegal hundi or manual systems and instead using legal and digital channels, which are now considered the safest and most cost-effective options for sending money home.
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