New Remittance Tax Proposal Threatens Consumer Privacy and Financial Access

The Innovative Payments Association (IPA), alongside several leading financial trade groups, has submitted a joint comment letter to the Senate Committee on Finance urging lawmakers to reject a proposed tax on remittance transfers.

The provision under consideration would impose a 3.5% tax on all cross-border money transfers, along with invasive requirements for U.S. citizens to verify their identity using sensitive personal information such as passports or Social Security numbers. This measure would turn financial services providers into de facto tax agents, responsible for collecting and reporting private consumer data to the federal government.

IPA President & CEO Brian Tate, one of the signatories to the letter, warns that this proposal would “create a dangerous precedent of government overreach, compromise financial security, and shift payments into unregulated underground channels.” The proposal threatens small businesses, service members, students, and families who rely on remittance services—not to mention the broader goals of financial transparency and anti-money laundering enforcement.

Instead of increasing security or efficiency, the tax would raise privacy concerns, increase compliance costs, and harm the very communities it claims to protect.
​
Download the full joint comment letter submitted to the Senate Committee on Finance.

DOwnload COmment Letter