Key Points of the Remittance Tax in Trump’s Budget Proposal
The U.S. Congress is preparing to vote on Donald Trump’s massive budget proposal, and one of the most sensitive points in the package is the proposal to impose a 1% tax on cash remittances sent abroad. This measure would directly impact millions of migrant families.
- A 1% tax is established on the total amount of each remittance transfer.
- The tax must be paid by the person sending the remittance.
- Remittance service providers (such as money transfer operators or stores with money transfer services) are obligated to collect the tax at the time of the transaction and remit it quarterly to the government.
- If the tax is not collected at the time of sending, the responsibility falls on the remittance provider, who must cover the corresponding amount.
Applies only to cash or physical instrument remittances
- The tax applies to remittances sent with:
- Cash
- Money orders
- Cashier’s checks
- Other similar physical instruments (as determined by the government)
- Exempt are transfers via debit or credit cards, or from a U.S. bank account.
Implementation
- This provision would apply to all remittances sent after December 31, 2025.
What’s at Stake in the Vote?
The legislation, presented by Republican senators and promoted as a priority of President Trump, will be put to an initial vote this weekend in the Senate. If it manages to surpass that step, a marathon process could extend until Sunday, when Democrats present amendments that are unlikely to be approved in a Republican-controlled chamber.
The Senate version, already approved in the House of Representatives, would place the project on the brink of becoming law if it receives a favorable vote.
Trump has recently pushed for approval before July 4, considering this proposal as a central part of his economic legacy.
Besides the remittance tax, Trump’s 940-page mega-proposal includes expanding tax cuts initiated in 2017, reducing social spending (especially healthcare – Medicaid), and increasing defense and border control allocations.
Although its promoters assert it will reduce the deficit, analysts warn that it could increase public debt by trillions of dollars.
Banxico Reiterates Concerns Over Remittance Tax
From Mexico, the Bank of Mexico (Banxico) reiterated its stance on the risks associated with a potential remittance tax sent from the U.S.
Two weeks ago, the central bank warned that this measure could represent a risk to financial flow stability and the well-being of families that depend on these resources.
Banxico considers that a tax of this type would directly affect recipient households, many of which are in vulnerable situations, and could encourage the use of informal channels for money transfers, complicating their tracking and supervision.
Additionally, it warned that it would have implications for the national economy in terms of consumption and regional dynamism, especially in areas with high remittance dependency.
