Mexican President Opposes GOP Bill Taxing Remittances, Calls It 'Discriminatory'

Mexican President Claudia Sheinbaum said she and members of all political parties in the country reject the Republican-led initiative to impose a 5% tax on some remittances, calling the proposal "discriminatory."

"Everyone from all parties said no. We are not in agreement with this injustice, which is discriminatory," Sheinbaum said. "All Mexicans over there pay taxes, whether they have documents or not," she added, referring to their immigration status.

A Senate commission joined the criticism, highlighting Mexicans' contributions to the U.S. economy in an open letter and calling on lawmakers to build bridges rather than "raising economic walls."

The proposed tax, part of President Donald Trump's "big, beautiful bill," would impose a 5% tax on such transfers and be aimed at people who are not U.S. citizens. That means those reached would include over 40 million people, including green card holders and nonimmigrant visa holders, The Associated Press explained.

Sheinbaum also said imposing the tax "would damage the economy of both nations and is also contrary to the spirit of economic freedom that the U.S. government claims to defend." Over $65 billion reached the country as remittances last year, according to Bloomberg Linea. The figure represented about 4% of the country's GDP.

Other countries with heavy emigration to the U.S. are also heavily dependent on remittances. It represents over a quarter of Honduras and Nicaraguas' GDP (25.9% and 27.6%, respectively), 23.5% of El Salvador's GDP and almost 20% of Guatemala's (19.5%).

Manuel Orozco, director of the Migration, Remittances, and Development Program at the Inter-American Dialogue told the outlet that the measure would have a negative impact on the U.S. He added that "some senders would find ways to send money differently, through unauthorized channels and others would send less." That latter scenario, he added, could incentivize people to migrate given a more dire economic situation.

However, proponents of the measure argue that many people migrate to the U.S. to find work and send money home. Making it more complicated, they say, would reduce incentives to migrate.

Remittances to Mexico have shown signs of decline in early 2025. Recent data from Mexico's central bank (Banxico) shows that remittances fell for the second straight month in February, reaching $4.45 billion—down from $5.22 billion in December and $4.66 billion in January, according to numbers obtained by Border Report. The number of transactions and the average amount sent have also declined, as February average remittances reached $381, compared to $393 in 2024.

Originally published on Latin Times