Trump's tax plan proposes remittance tax and tip tax exemption

The tax bill, currently under discussion in the United States Congress, has drawn criticism from immigrant communities and economists.

According to estimates, the measure could cause a drop of up to 10 percent in remittances sent to countries such as Mexico, Guatemala, and El Salvador.

The government is seeking to make the tax applicable only to undocumented migrants, while tax relief on tips would benefit service sector workers.

The tax would directly affect the flow of money sent from the United States to regions highly dependent on remittances, such as Mexico, Guatemala, El Salvador, and Honduras. Currently, remittance transfers already include fees of between 5% and 10% from companies such as Western Union and MoneyGram International, which could translate into a total burden of up to 15% for senders.

According to Bloomberg, this tax will have an impact on the consumption of recipient households, especially those with fewer economic resources. "The effect is not only macroeconomic, but also microeconomic, as it affects families," stated the Central Bank of Guatemala, noting that remittances not only represent a significant portion of GDP but are also a fundamental source of consumption.

Projections indicate that the volume of remittances could fall by up to 10%, both in terms of amounts sent and the number of transactions. In Mexico, it is estimated that this measure could mean a reduction of approximately US$1.5 billion compared to the US$62.5 billion received in 2024, according to data from the Bank of Mexico.

A report by El Economista stated that the proposal seeks to apply the 5% tax exclusively to undocumented remittance senders. In the case of the Mexican population in the United States, it is estimated that around 35.8% are in an irregular immigration status.

Given the possibility of this new tax charge, some analysts have suggested that migrants could opt for alternative methods to send money, including the use of cryptocurrencies. These platforms, although not yet widely adopted, offer lower-cost international transfers without traditional intermediaries.

Another provision of the fiscal bill is the tax exemption for income derived from tips. This measure is designed to benefit service sector workers, such as waiters, hotel staff, and other similar occupations , whose income depends largely on this type of gratuity.

According to Trump campaign spokespersons, the exemption seeks to "recognize and compensate workers for their labor" in a sector that was particularly hard hit during the pandemic. The initiative aims to exempt tips from federal taxes, which would increase the net income of employees who receive them.

The "Big Beautiful Bill" is being debated in Congressional committees and has not yet been voted on in the House. Tax experts have indicated that, if passed, it will require significant adjustments to money transfer companies' financial reporting systems, as well as a possible redefinition of the criteria for classifying remittance senders as "documented" or "undocumented."

For now, the debate remains open, with migrant rights organizations pushing for the proposal to be withdrawn or, alternatively, modified to minimize its negative impact on the affected communities.