Potential Tax in the U.S. Could Affect Receipt of Remittances, Warns Caja Popular Mexicana
LEÓN, Guanajuato.– The proposal to implement a 3.5% tax on remittances sent from the United States, currently under discussion in the U.S. Congress, has raised alarms within Mexico’s financial sector. According to Ricardo López, CEO of Caja Popular Mexicana (CPM), such a measure could lead to a significant decrease both in remittance flows and revenue for recipient institutions.
Caja Popular Mexicana, the country’s largest savings and credit cooperative, processed a total of 157,699 remittance transactions in 2024, totaling 1,927.7 million pesos. Between January and May of this year, the cooperative had already recorded 92,994 transactions amounting to 1,233.7 million pesos, which represents roughly 64% of the total amount received in the entire previous year. The institution also noted that May set a new record for money transfers, according to its own figures.
Remittances, which are sent primarily by Mexican workers living in the United States, remain a vital source of income for many families and communities in Mexico. The states of Guanajuato, Chiapas, Michoacán, San Luis Potosí, and Jalisco top the list of regions receiving the most remittances, and could thus experience a greater impact if the new tax is enacted.
Currently, the Mexican economy significantly benefits from remittances: in 2023 alone, the country received over $63 billion, an all-time high that equaled nearly 4% of the national GDP. The steady flow of remittances contributes substantially to household consumption, local development, and, in many cases, helps mitigate the effects of inequality and the lack of job opportunities—especially in rural areas.
CPM channels remittances through strategic alliances with five U.S.-based money transfer companies, including Western Union, Vigo, Orlandi Valuta, Uniteller, MoneyGram, and Order Express. Given the scale of these operations, any changes in the regulations governing money transfers from the U.S. could mean significant adjustments for Mexican financial institutions and for the families that rely on these funds.
Experts warn that imposing a tax could discourage formal remittance transfers, encouraging people to seek informal, riskier, and more expensive alternatives, or even reduce the amounts they send. Additionally, a drop in remittance flow would mean lower income for banks and cooperatives, as well as fewer resources available for consumption and local investment in recipient states.
Although the initiative to tax remittances is still in the legislative process and its approval is not guaranteed, the financial sector and recipient communities remain vigilant regarding potential regulatory changes in the United States. In the short term, the outcome of this measure will be crucial for the financial well-being of thousands of Mexican families and for the stability of several financial institutions in the country.
In summary, the possible imposition of a remittance tax in the U.S. could negatively affect both direct beneficiaries and the Mexican economy as a whole, given the strategic importance of this flow of money. Mexican authorities and the national financial sector are now focused on monitoring U.S. legislative developments and seeking solutions to mitigate any future repercussions.
