US tax on remittances could reduce household spending by 25%, says ANPEC

New authorities introducing a 1% taxation connected currency remittances sent from the United States to Mexico could effect successful a 25% alteration successful Mexico’s household spending, the president of the National Alliance of Small Business Owners (ANPEC), Cuauhtémoc Rivera, said connected Monday. 

Approximately 11.3% of Mexican households person remittances from the U.S., astir of which spell towards user spending, Rivera said successful an interrogation with the paper El Economista.

Remittances to Mexico diminution 12%, the biggest driblet successful implicit a decade

Rivera expects families successful the states of Chiapas, Guerrero, Michoacán, Zacatecas, Oaxaca, Guanajuato, México state, Puebla and Mexico City to beryllium astir affected by the tax.  

Chiapas, connected the borderline with Guatemala, receives the largest magnitude of remittances nationwide, contributing 14.31% of its GDP. 

Although immoderate experts suggest that migrants volition accelerate remittance transfers earlier the taxation takes effect, Rivera is not truthful sure.  

“With the persecutory migration argumentation [migrants] are taxable to successful the United States, they surely don’t person the capableness to summation their dollar transfers [in the abbreviated term],” Rivera said.  

“Remember that migrants unrecorded time to time due to the fact that their jobs are temporary, and they are hiding from migration authorities.”

Members of the Confederation of National Chambers of Commerce, Services and Tourism (Concanaco Servytur) voiced akin concerns astir the 1% remittance levy. 

“We cannot disregard the governmental undertones of this proposal,” said Concanaco Servytur’s president, Octavio de la Torre. 

“It goes beyond a fiscal issue; it is simply a stroke to the efforts of migrants, who person sustained a important information of the system for decades.”

De la Torre emphasized the important publication of remittances to the Mexican economy. In 2024, Mexico received implicit US $65 cardinal successful remittances, equivalent to 3% of the nationalist GDP. 

Some fiscal institutions, specified arsenic BBVA México, expect that remittance senders volition sorb the taxation to debar reducing the magnitude they nonstop to household members. Migrants whitethorn besides determine to usage informal channels to debar the tax, according to de la Torre. 

During her June 30 property conference, Mexico’s President Sheinbaum said that the Mexican authorities planned to reimburse the 1% U.S. taxation connected currency remittances.

In Mexico, currency makes up 1% of each remittances received, though remittances sent electronically via currency deposit (at a Western Union, for example) whitethorn relationship for up to 40% of each remittances sent from the U.S. to Mexico.

The Trump medication has not clarified whether these remittances volition beryllium taxed equally.

With reports from El Economista and Newsweek en Español