Ahead of his second term inauguration on January 20, 2025, US President-elect Donald Trump made a bold announcement regarding his plans to create a new government body: the External Revenue Service. This new agency is designed to collect tariffs, duties, and other foreign revenue derived from international trade, shifting away from the current system that relies heavily on domestic taxes through the Internal Revenue Service (IRS).

Trump shared the news on his social media platform Truth Social, where he explained his dissatisfaction with the current US tax system. He criticised the IRS for being overly reliant on taxing American citizens and argued that foreign entities benefiting from trade with the US have not contributed their fair share. Trump's announcement outlined the creation of a new approach to trade and revenue collection, with the primary goal of ensuring foreign entities start paying their fair share for the benefits they derive from American trade.

Trump stated, "For far too long, we have relied on taxing our Great People using the Internal Revenue Service (IRS). Through soft and pathetically weak trade agreements, the American economy has delivered growth and prosperity to the world while taxing ourselves." His sentiment echoes his broader criticism of trade policies that he believes have been disadvantageous to the US in the past.

The establishment of the External Revenue Service marks a significant shift in how the US may approach its foreign trade relationships and revenue generation. According to Trump, January 20, 2025, will serve as the birth date of the External Revenue Service, the first step toward shifting the burden of taxation away from US citizens to those benefiting from trade with the nation. Trump emphasized, "It is time for that to change. We will begin charging those that make money off of us with trade, and they will start paying, finally, their fair share."

In his social media message, Trump made clear that foreign countries and entities that engage in trade with the US will now be expected to contribute to the national economy by paying for the tariffs and duties the US imposes on imports. This new initiative represents a strategic pivot in his economic and trade policies, aimed at revitalizing the US economy through more fair trade practices.

The Internal Revenue Service (IRS), which has been the backbone of the US tax system for decades, is designed to collect domestic taxes in line with Internal Revenue Code (IRC) regulations. The IRS is led by the Commissioner and the Deputy Commissioner, who oversee the agency’s functions related to tax collection and enforcement. It was established under the authority of the Treasury Secretary and has played a central role in managing the tax laws of the US. However, Trump’s vision for the External Revenue Service signals his intention to restructure the way the US handles revenue collection related to international trade.

The announcement came just ahead of Trump’s official swearing-in ceremony for his second term, which is scheduled for January 20, 2025. Earlier, the US Congress convened to count electoral college votes and officially certify Trump’s victory over Vice President Kamala Harris. With 312 electoral votes in his favor, Trump’s election was certified with no objections from lawmakers, paving the way for his second term.

As Trump moves forward with his plans for a new tax agency and foreign revenue collection system, many are watching closely to see how these changes might impact the US economy and its future trade agreements. The creation of the External Revenue Service could be a landmark moment in US tax policy, reflecting Trump’s broader approach to making America great again through more fair and strategic international trade policies.

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