Republicans Push for Tax on Remittances

Taxes on Remittances Up to 37%

Activists Fear Increased Migration

Remittances Sustain Latin American Economies

Two Republican-backed bills aim to impose taxes on remittances sent from the U.S., a move that could deepen irregular migration and destabilize Latin American economies, activists warn.

Why taxes on remittances matter:

Remittances account for up to 30% of GDP in some Central American countries and are essential for the survival of millions of families. Implementing taxes on remittances would directly impact their economies and increase migratory pressure toward the U.S.

The proposals at stake:

The “Big and Beautiful Border Security Bill” includes a 5% tax on remittances sent by undocumented immigrants and those with temporary immigration status.

The “Border Security Investment Act” proposes a 37% levy on transfers to the five countries with the highest number of illegal entries into the U.S.

Republicans Push for Tax on Remittances – Photo: Canvas

What activists say about taxes on remittances:

Juan José Gutiérrez, from the Full Rights for Immigrants Coalition:
“This doesn’t solve undocumented migration. It makes it worse. The root cause is poverty, and this tax (on remittances) only deepens it.”

Teresa Tejada, director of ASOSAL:
“It would be an economic catastrophe. Remittances are the lifeline for thousands of families.”

Context:

Both proposals align with the immigration agenda of former President Donald Trump. The 5% tax on remittances would help fund his plan for tax breaks and border security. While the bills currently lack the votes for passage, they could be added to an amended version with broader support.

Between the lines:
The tax would apply to immigrants with various statuses, except U.S. citizens. Trump previously supported such measures during his first term.

International reaction:

Mexican President Claudia Sheinbaum harshly criticized the proposal:
“How can they tax something when people already pay taxes there, whether they have documents or not?”

And furthermore:

Republican Congressman Carlos Giménez called for a total ban on remittances to Cuba as punishment for the regime, fueling debate over the political use of remittance flows.

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