Mexican President Welcomes Tax Cut On Remittances For Migrants, Vows to Keep Fighting

Mexican President Claudia Sheinbaum said that the U.S. lowered its proposed tax on remittances from 5% to 3.5%, but that officials will continue working to lower it further.

During her daily press conference on Thursday, Sheinbaum welcomed a move by U.S. lawmakers to reduce the proposed tax rate to 3.5%, but said she would keep pushing for its full elimination. She argued that the tax would harm not just Mexico, but many countries in the region and beyond.

"We will continue speaking with both Republican and Democratic senators to explain why it is not good to have a remittance tax in the country," Sheinbaum said.

"For now, the remittance tax rate has been reduced from 5% to 3.5%. Still, we don't want there to be any tax at all, so we will continue working to ensure there is no tax on the remittances our compatriots send to their families in Mexico," she added.

Remittances — money sent by migrants to support their families or businesses in their countries of origin — are a critical economic lifeline for many countries across the globe.

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.

Sheinbaum noted that remittances play an even larger role in several Central American economies, where they represent more than 25% of GDP in Nicaragua and Honduras, 23.5% in El Salvador, and 19.5% in Guatemala.

"Remember that this reduction is not only important for Mexico. There are countries in Central America where remittances represent 20% of GDP. In our case, it's around 3%. It's important for all countries — even for India," she added.

Sheinbaum's comments came just hours after House Republicans approved Trump's proposed legislation, dubbed the "One Big, Beautiful Bill." The sweeping package includes tax cuts, spending reductions, stricter immigration enforcement, and a proposed remittance tax, among other changes.

Although the measure passed in the House, it has not yet become law and is expected to undergo revisions in the Senate before any version could reach Trump's desk.

Meanwhile, signs of a slowdown in remittance flows to Mexico have raised additional concerns.

According to data shared by Mexico's central bank in April, remittances fell in both January and February of this year, totaling $4.45 billion in February — down from $5.22 billion in December 2024. The number of transactions and the average amount sent have also declined, with the average transfer falling to $381 in February, compared to $393 in the same period last year.

Analysts attribute the decline to a combination of Trump-backed tariffs and aggressive immigration enforcement, which have created financial strain and heightened fear among undocumented workers — prompting many to reduce or delay the money they send home.