President Claudia Sheinbaum and the Mexican Senate denounce a U.S. House proposal to levy a 5% tax on remittances sent by non-citizen migrants, calling it discriminatory and harmful to both economies.
Mexico’s President Claudia Sheinbaum and the full Mexican Senate issued a joint rebuke on May 14, 2025, of a Republican-led proposal in the U.S. House of Representatives to impose a 5 percent tax on remittances sent abroad by non-citizen immigrants. At her daily morning press conference, Sheinbaum characterized the plan—embedded in the so-called “One Big Beautiful Bill” before the House Committee on Ways and Means—as an “injustice” and “discriminatory” measure that unfairly targets migrant workers who already contribute to the U.S. tax system.
The remittance tax proposal, spearheaded by House Ways and Means Chair Jason Smith (R-MO), would apply a 5 percent excise levy to money transfers sent by green card holders, visa holders (including H-1B, H-2A and H-2B categories), and other non-citizen residents, while exempting U.S. citizens. The measure is part of a broader budget package aimed at raising revenue and penalizing unauthorized immigration but could drastically reduce the funds migrant workers send home to support their families and local economies.
Mexican immigrants in the United States remit over US $60 billion annually to Mexico—an amount equivalent to approximately 3.4 percent of Mexico’s gross domestic product—and serve as a lifeline for millions of households. Globally, remittance flows reached a record US $656 billion in 2023, with India, Mexico and China the top three recipients; Mexico alone saw transfers grow 7.6 percent last year to US $63.3 billion. Economists warn that even a modest tax could erode this vital source of foreign currency, curtail household spending, and undercut local investment in Mexico’s most remittance-dependent states.
At the press conference, President Sheinbaum pointed out that Mexicans in the U.S.—whether documented or undocumented—already pay income, sales, and property taxes. “All the Mexicans who live in the United States pay taxes,” she said, noting that some U.S. states such as Oklahoma already impose fees on remittance transfers. “Why should they be hit with an additional, arbitrary tax when they are already contributing to the system?”.
On May 13, the Mexican Senate formally adopted a resolution condemning the proposed tax as “an unjust double taxation” of migrant workers and urging the U.S. legislature to “reconsider this proposal, which would harm the economies of both countries.” The resolution, endorsed unanimously by party leaders across Mexico’s political spectrum, warned that adding a levy on remittances “is contrary to the spirit of economic freedom”—a principle enshrined in North American trade agreements—and would drive many migrants toward informal or unregulated transfer channels.
Senate leaders cited technical analyses predicting that a 5 percent remittance tax would disincentivize the use of formal banking services, prompting the creation of a parallel “black market” for money transfers and ultimately reducing the total volume of remittances received. “We know that if you have to send $100, you will seek ways to ensure the full amount reaches your family,” warned José Iván Rodríguez Sánchez of the Baker Institute Center for the U.S. and Mexico, whose insights were read aloud by Sheinbaum during the press briefing.
Beyond its direct impact on recipients, the Senate highlighted that migrant earnings largely remain in the U.S. economy—an estimated 80 percent—through spending on housing, goods and services. By curtailing remittance flows, the policy could shrink domestic consumption in U.S. communities with high immigrant populations, potentially dampening economic growth at home as well as abroad.
The White House has also signaled tougher stances on remittances. In late April, former President Donald Trump previewed a presidential memorandum to “shut down remittances” sent by people in the U.S. illegally—a move that Treasury officials have yet to detail. Meanwhile, Vice President J.D. Vance, as a senator, co-sponsored a 2023 bill that would have imposed a 10 percent fee on remittances, refundable for those who could prove U.S. citizenship.
House Republicans argue the remittance tax would generate revenue to offset federal spending and discourage undocumented immigration by reducing the financial incentive to migrate. Proponents like Mark Krikorian of the Center for Immigration Studies contend that a withholding requirement on money transfers is a “common-sense solution” to prevent taxpayer-funded benefits from indirectly subsidizing unauthorized immigrants. However, critics counter that the policy penalizes lawful visa holders, green card holders, and citizens of partner nations, undermining bilateral relations and free-trade commitments.
Experts caution that migrants faced with higher transfer costs may resort to informal channels—such as cash hand-carrying, unlicensed couriers or crypto-based platforms—eroding oversight, increasing fraud risks, and diminishing central banks’ ability to track capital flows. Moreover, reduced remittances could heighten economic insecurity in Mexico, where many households depend on the funds for basic needs, education, healthcare, and small-business investments.
The Senate’s joint statement concluded with an appeal to U.S. lawmakers: “Relations between brotherly peoples are strengthened through dialogue and mutual understanding, building bridges, not erecting walls or economic barriers.” With the House expected to vote on the budget package as early as next week, Mexico’s government says it will continue diplomatic outreach to inform American counterparts of the proposal’s potentially harmful cross-border repercussions.
As the debate unfolds, migrant advocacy groups and financial institutions on both sides of the border are mobilizing data to highlight remittances’ critical role in poverty reduction, community development and economic resilience. The coming days will test whether the U.S. Congress heeds calls to amend—or remove—the controversial remittance tax before the budget bill advances to the Senate and, ultimately, the president’s desk.
