Republicans proposed remittance taxes as part of a broader push to crack down on undocumented immigrants.
Mexican President Claudia Sinbaum has condemned the provisions of the tax bill being considered in the US Congress. This imposes a duty on remittances.
At a morning press conference Thursday, Shainbaum spoke directly to the tax bill, calling the remittance proposal “an unacceptable measure.”
“It would lead to double taxation because Mexicans living in the US already pay taxes,” she said.
She added that her government is reaching out to other countries with large immigrant groups to express concern about the US proposal.
“This doesn’t just affect Mexico,” she said. “It also affects many other countries and many other Latin American countries.”
According to World Bank data in 2024, India is the largest recipient of international remittances, with $129 billion from overseas, followed by Mexico with over $68 billion.
In Mexico in particular, experts estimate that remittances are close to 4% of GDP.
However, the widespread tax bill defended by US President Donald Trump includes language that imposes a 5% sales tax on remittances specifically sent by noncitizens, including visa holders and permanent residents.
The bill would affect nearly 40 million people living in the country. However, US citizens are exempt from remittance tax.
As part of his “America First” agenda, Trump led a campaign to discourage immigrants to the US and promote “massive deportation” in his second term, in office.
Advocates of the platform say taxable remittances serve as a clear deterrent for immigrants who come to the US in search of better economic opportunities for themselves and their loved ones who want to go back to their home and support them.
Mark Clicorian, executive director of the Center for Immigration Research, an anti-immigration think tank, told The Associated Press that he believes the remittance barrier will help curb undocumented immigration to the United States.
“One of the main reasons people come here is to do their jobs and send their money home,” Krikolian said. “It’s not appealing to come here if it’s much more difficult to do that.”
Under the House of Representatives weighing bill, 5% of tax is paid by the sender and collected by the “transfer transfer provider,” who sends the money to the US Treasury Department.
But President Sinbaum and other leaders have called on Congressional Republicans to reconsider the provisions given that they can produce unintended consequences. Sheinbaum even suggested that taxes would be considered unconstitutional in the United States.
“This is fraudulent except that it is unconstitutional,” she said Thursday. “And that’s the tax on the fewest people. They need to charge taxes from the people at the top, not the people at the bottom.”
Critics of the measure pointed out that remittances will help stabilize poor regions overseas, thereby limiting the possibility of undocumented migration from these regions.
Additional barriers to sending remittances can create economic set-offs for these communities, but needless to say, the process will be more difficult for US citizens who are exempt from proposed taxes.
Still, even if the tax bill is defeated or the remittance provisions are removed, the Trump administration signal plans to move forward with other measures designed to stop immigrants from sending funds abroad.
On April 25th, Trump posted to his media platform, Truth Social. This is a list of “Weekly Policy Outcomes.”
On the final page, the number one bullet point under “International Relations” was to “finalize the President’s memorandum to close remittances sent by illegal foreigners outside the United States.” Trump called the document “essential reading.”