
Remittance Tax in the U.S.: Risks of Fraud, Crime, and Harm to Families
The recent approval by the U.S. House of Representatives of a bill proposing a 3.5% tax on remittance transfers has raised alarms among experts and economists on both sides of the border. The measure, part of a legislative plan promoted by former President Donald Trump, still needs to be reviewed by the Senate, but it is already generating serious concerns.
According to experts interviewed by Univision Noticias, this tax would primarily affect undocumented immigrants and non-citizens, who would not be exempt from paying and would not be eligible for tax refunds. As a result, many may turn to informal channels to send money to their families, thereby exposing themselves to fraud, theft, and potential involvement with organized crime.
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The Risk of Informal Channels
Former deputy governor of the Bank of Mexico (Banxico), Gerardo Esquivel, stated that such measures could prompt immigrants to send cash through third parties—an approach highly vulnerable to theft. He also warned of possible scams by individuals offering to transfer remittances without the tax, taking advantage of the vulnerability of these communities.
Adding to these concerns, Gabriela Siller, director of Banco Base, emphasized that faced with this new tax burden, immigrants may seek alternatives that include physically transporting cash by road—a high-risk method, especially in areas with high levels of insecurity.
Organized Crime and Money Laundering
One of the most worrisome side effects of the tax would be the increased use of unconventional channels, which could be exploited by criminal organizations offering money transfer services with the goal of laundering funds or seizing a portion of the remittances. BBVA bank also warned of this possibility in a recent report.
According to Esquivel, this scenario presents a real risk: “Organized crime could identify opportunities in these untaxed channels and taint the process with illicit activities.”
Impact on Households, Not the Macroeconomy
Although the measure would not significantly affect the Mexican economy at a macroeconomic level, the blow would be strongly felt by households that depend on remittances to cover basic needs. In 2024 alone, Mexico received over $64 billion in remittances, and states like Michoacán, Guerrero, Chiapas, and Zacatecas rely on them for more than 10% of their state GDP.
“The impact will be primarily distributive and on the most vulnerable segment of the population,” Esquivel explained.
Low Expected Revenue
Despite the risks, the revenue potential of this tax would be limited. According to Banco Base estimates, it would generate only 0.046% of the U.S. GDP. This suggests that the objective of the tax may be more political than economic.
“The measure would create more complications than benefits, obscuring formal channels and opening the door to risky and illegal practices,” said Damian Fraser, director of consulting firm Miranda Partners.
Conclusion
The proposed 3.5% remittance tax on money sent by immigrants in the U.S. could have direct implications for the safety and well-being of millions of families in Latin America, particularly in Mexico. Experts warn that such a measure could encourage the use of informal channels and put senders at risk, while offering minimal fiscal benefits to the U.S. government.
As the Senate reviews the proposal, the debate continues over the real consequences of applying a fiscal policy of this kind to a financial lifeline that sustains millions of households across the region.
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