Trump’s tax plan will impose a 1% tax on cash remittances

Washington. – The United States Senate approved this Tuesday a reduction in the remittance tax from 3.5% to 1%, as part of the budget package promoted by President Donald Trump, who plans to enact it this July 4th. The measure represents partial relief for millions of migrants in Latin America, including a high number of Dominicans who send money from the U.S. Despite the percentage decrease, the tax will be added to the fees already applied by companies like Western Union or MoneyGram, raising the total cost of each shipment.

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The new levy will only apply to cash transfers or similar instruments, such as cashier’s checks, and will not affect those made from bank accounts or cards issued in the U.S. In the Dominican Republic, where remittances represent about 7% of the GDP, the measure generates concern. Other countries such as Mexico, El Salvador, Honduras, and Guatemala could also be seriously affected. Mexico, in fact, has already announced that it is preparing a program to return 1% to Mexican migrants. According to IDB data, Latin America and the Caribbean received 161 billion dollars in remittances in 2024, with Mexico being the largest recipient. The law still needs to be ratified by the House of Representatives to take effect on December 31, 2025.