The Proposed Tax on Remittances and Its Implications
A proposed 5% tax on remittances sent from the United States to Mexico is advancing, raising concerns about potential double taxation and breaching international tax agreements.
Key Figures Involved:
- Claudia Sheinbaum: President of Mexico, who has requested the Trump administration to respect the agreement to avoid double taxation as per the former North American Free Trade Agreement (NAFTA).
- Edgar Amador: Mexico’s Secretary of Finance, who stated that the new remittance tax would violate international tax treaties.
- Esteban Moctezuma: Mexico’s Ambassador to the United States, leading lobbying efforts with US congress members and organizations of Mexican workers in the US to prevent the tax implementation.
In 2024, remittances to Mexico totaled $64.7 billion, accounting for 3.5% of the country’s GDP. This year, remittances are expected to reach $65 billion.
Approximately 99.1% of remittances are sent electronically, ensuring a regulated, legal, and transparent market overseen by authorities in both countries.
Potential Impact on Mexican Families
The proposed tax poses a significant risk to Mexican workers’ remittances and the income of over 10 million Mexicans and 4.5 million households that rely on these funds.
These remittances are crucial for millions living in challenging economic conditions in their home country.
Increased Income from Large Taxpayers
The Mexican government has intensified the taxation campaign for large taxpayers with annual incomes exceeding 1,000 million pesos since the previous administration.
The Servicio de Administración Tributaria (SAT) reported collecting 177,208 million pesos during the first quarter of 2025, representing a 74.7% real increase compared to the same period in 2024.
The SAT also achieved the full or partial regularization of 148 large companies from January to March of this year, focusing on sectors like hydrocarbons, finance, professional services, mining, and manufacturing.
Agribusiness Sector Thrives Amidst Economic Challenges
Despite the nation’s overall economic growth of only 0.2% in Q1 2025, the agribusiness sector expanded by 6%, showcasing its resilience.
The Canacintra, led by Esperanza Ortega, and the Mexican state of Baja California, governed by Marina del Pilar Ávila, are organizing the 4th International Agriindustrial Forum in Mexicali from June 12-14, 2025, to bring together thousands involved in the agriindustrial sector from Mexico and other countries.
Key Questions and Answers
- What is the proposed tax on remittances? A 5% tax on money transfers from the US to Mexico, which could lead to double taxation and violate international tax agreements.
- Who is opposing the proposed tax? Mexico’s President Claudia Sheinbaum, Secretary of Finance Edgar Amador, and Ambassador Esteban Moctezuma are lobbying against the tax implementation.
- What is the significance of remittances to Mexico? In 2024, remittances totaled $64.7 billion, accounting for 3.5% of Mexico’s GDP and supporting over 10 million people.
- What is the recent success of Mexico’s taxation campaign for large taxpayers? The Servicio de Administración Tributaria (SAT) collected 177,208 million pesos in Q1 2025, a 74.7% real increase from the same period in 2024, targeting sectors like hydrocarbons, finance, and manufacturing.
- How is Mexico’s agribusiness sector performing? While the nation’s overall economy grew by only 0.2% in Q1 2025, the agribusiness sector expanded by 6%, demonstrating its strength.
