The U.S. House Ways and Means Committee has approved a bill that proposes a 5% tax on remittance payments sent abroad by non-citizen immigrants. This measure is part of a broader tax plan known as the “One Big Beautiful Bill”, which aims to reform various aspects of the U.S. tax system.
Remittances are electronic money transfers sent by individuals in the U.S. to family members or others in foreign countries. In 2023, U.S. residents sent approximately $93 billion in remittances worldwide, with a significant portion going to countries like Mexico and Ghana. These funds are often used to cover essential expenses such as food, housing, education, and healthcare.
The bill includes exceptions for most transfers made by U.S. citizens, meaning the tax would primarily affect immigrants who send money abroad. Critics argue that this tax could drive remittance transactions underground, leading to the emergence of informal and potentially illegal money transfer methods. Some experts warn that such a tax could reduce the amount of money reaching developing countries, negatively impacting families who rely on these funds.
The proposal has faced strong opposition, particularly from Mexico, whose government has condemned the tax as discriminatory and unjust. Mexican officials argue that immigrants already contribute to the U.S. economy through taxes and labor, and imposing additional financial burdens on them is unfair.
The bill is expected to be debated further in the U.S. Senate, where its future remains uncertain. If passed, it could significantly alter the way remittances are handled and impact millions of immigrant families worldwide.
With information from OEM
