Claudia Sheinbaum’s administration is seeking to circumvent the 1% tax on remittances from undocumented migrants, which is about to be approved by the US Senate. The president announced this Monday that, once the tax is approved in Washington, her administration will reimburse that amount to Mexicans, as long as they send the money through the government entity Financiera del Bienestar (Finabien). “How is the wording? There’s 1%, but only for remittances sent in cash. All electronic transfers have 0% tax, and more than 90% are sent electronically. For those (compatriots) who send in cash, on Friday of this week we will announce a special program through the Finabien card to reimburse them for that 1%,” she said.
Sheinbaum celebrated the fact that the budget proposal being discussed by US senators in recent days reduced the tax from the original 5% proposal, then to a proposed 3.5%, and finally to 1%. The president described the tax reduction as a victory for Mexican migrants in the United States. “This achievement belongs to our fellow countrymen, primarily, for sending letters to their senators, especially those with dual nationality, which was something that was promoted, and many letters arrived from Mexicans and Mexican senators who visited US senators to request that there be no tax on remittances,” she commented.
The proposal to tax remittances sent by Mexicans in the US comes amidst a climate of extreme uncertainty due to Trump’s tariff wall. As of last April, remittances reported by Mexico totaled $4.761 billion, a 12% drop compared to the same month in 2024. This decline was the steepest since September 2012, according to official data. A BBVA analysis notes that the contraction may have been caused by the uncertainty surrounding trade policy in the United States and the depreciation of the dollar against the peso. The Executive Branch will provide more details on this reimbursement program at the end of the week, as Trump’s tax initiative has not yet been approved in the US Senate.
A US tax change on remittances represents a direct blow to Mexico’s finances due to their importance. In 2024, the money sent by Mexicans to the country exceeded $64.7 billion, a record figure. The dollars sent by Mexicans, primarily from the United States, exceed those generated by the agri-food sector, foreign direct investment, oil sales abroad, and the economic impact generated by international tourism. According to World Bank data, remittances from the United States totaled more than $656 billion in 2023. India, Mexico, and China are the largest recipients of these funds.
