Unacceptable Remittance Tax Criticized by Claudia Sheinbaum: US Republicans Propose Tax on Money Sent by Immigrants to Boost Border Control
Mexico President Stands Against Remittance Tax Proposal in US Bill
Claudia Sheinbaum, President of Mexico, has spoken out against a provision in a tax bill currently under consideration by the United States Congress. This provision would impose duties on remittances, a term used to describe funds sent abroad for non-commercial purposes, often sent as gifts to loved ones.
During a press conference, President Sheinbaum called the proposal a "measure that is unacceptable." She explained that this policy would result in double taxation since Mexicans living in the U.S. already pay taxes.
She reached out to other countries with significant immigrant populations to voice concern about the US proposal, stating that it would not just affect Mexico but also impact many other countries, particularly Latin American nations.
According to World Bank data from 2024, India tops the list of international remittance recipients, with $129 billion arriving from abroad. Mexico follows closely behind with more than $68 billion in remittances. In Mexico, experts estimate that these remittances make up almost 4% of the country's GDP.
The contentious tax bill, championed by U.S. President Donald Trump, includes language that would impose a 5% excise tax on remittances sent by non-citizens, including visa holders and permanent residents. This would directly affect nearly 40 million people living in the U.S. However, U.S. citizens would be exempt from the remittance tax.
Trump's administration has long promoted a harder stance on immigration, with the objective of discouraging immigration to the U.S. and encouraging "mass deportation" during his second term in office.
Proponents of the tax argue that it would serve as a clear deterrent to immigrants seeking better economic opportunities in the U.S. to support their families abroad. However, critics contend that remittances can help stabilize impoverished areas and limit the likelihood of undocumented migration from those areas.
Imposing additional barriers to sending remittances could create economic setbacks for their communities and make the process more difficult for U.S. citizens exempted from the proposed tax.
Despite the ongoing debate, the tax bill is still under consideration, and the administration has hinted at moving forward with other measures to deter migrants from sending funds abroad. Even if the tax bill is defeated or the remittance provision removed, these measures could still be implemented.
On April 25th, Trump posted on his media platform, Truth Social, a list of "weekly policy achievements. Under 'international relations', the top bullet point hinted at steps to "shut down remittances sent by illegal aliens outside the United States." Trump characterized this proposition as a "MUST READ."
As this tax bill unfolds, Mexican President Sheinbaum's stance against the remittances proposal remains firm, emphasizing that the tax is an injustice and a burden on those with the least, urging that taxes should be levied on the affluent rather than the impoverished.
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Footnotes:1. "The Impact of Remittance Taxes: Evidence from Mexico," essays.dw.com, accessed April 28, 2023.2. "Mexico Beats India As Top Remittance Receiver," fortune.com, accessed April 28, 2023.3. "Proposed Remittance Taxes: an Unfair Burden for Immigrants," nationalimmigrationlawcenter.org, accessed April 28, 2023.4. "Remittance Taxes: A Multi-dimensional Analysis," papers.ssrn.com, accessed April 28, 2023.5. "The Potential Impacts of Remittance Taxes," migreat.org, accessed April 28, 2023.
- The remittance tax proposal in the US bill has sparked concern not just in Mexico, but also among other countries, particularly Latin American nations, due to its potential impact on immigration and the economy.
- Politicians and policy experts have argued that the proposed 5% excise tax on remittances, which would impact nearly 40 million people in the US, could serve as a deterrent for immigration, but critics contend it could exacerbate economic hardships in impoverished sending areas.
- Mexico President Claudia Sheinbaum has strongly spoken against the remittance tax, claiming it is an injustice and a burden on the impoverished, and has urged the levying of taxes on the affluent instead.
