Mexican President Sheinbaum Announces Plan to Reimburse Proposed U.S. Tax on Migrant Remittances

As U.S. lawmakers continue revising President Donald Trump's "Big Beautiful Bill" — which is expected to include a tax on remittances sent by immigrants in the U.S. to their home countries — Mexican President Claudia Sheinbaum said her administration plans to reimburse the 1% tax the U.S. is considering on cash transfers from Mexican nationals.

During her daily morning press conference, Sheinbaum said her administration will launch a special program by the end of the week to reimburse the 1% tax charged on cash transfers.

"This Friday we're going to announce a special program through the Finabien card to reimburse that 1%," Sheinbaum said.

Remittances — money sent by migrants to support family or businesses in their home countries — are a vital economic lifeline for many nations worldwide.

In 2024, Mexico received a record $64.7 billion in remittances, accounting for nearly 4% of its gross domestic product, according to the country's central bank.

In May, Sheinbaum highlighted that remittances play an even larger role in several Central American economies, representing more than 25% of GDP in Nicaragua and Honduras, 23.5% in El Salvador, and 19.5% in Guatemala.

"Keep in mind, this reduction is not only important for Mexico. In some Central American countries, remittances make up 20% or more of GDP. In Mexico, it's about 3%. This matters to many countries — even India," Sheinbaum said in May.

In another passage of her conference, Sheinbaum said data from Mexico's central bank show more than 99% of remittances sent by Mexican nationals in the U.S. are electronic transfers, and the federal government expects to reimburse more than $266 million annually through the new program.

"We've seen important progress, largely thanks to our compatriots in the U.S. who took action by writing letters to U.S. senators opposing the proposed tax on remittances," Sheinbaum said, highlighting efforts made by Mexican lawmakers against the measure.

The tax on remittances was first introduced in May, when the U.S. House of Representatives approved a 5% tax as part of Trump's bill. For months, Sheinbaum and Mexican lawmakers called the tax "unfair and discriminatory."

Despite the opposition, the bill passed the House with the tax reduced to 3.5% and was sent to the Senate for further revision.

Before the Senate's review, Mexican senators met with their U.S. counterparts to oppose the tax and urge them not to support it.

On June 28, the Senate further reduced the tax to 1%. According to Politico, the tax is expected to generate about $26 million annually, with funds earmarked to hire up to 10,000 new Immigration and Customs Enforcement (ICE) agents.