Overview:
A controversial new provision taxing remittances sent from the United States to foreign countries is set to take effect early next year as a strategy to curb undocumented immigration. Haitian American communities fear the measure could hurt families dependent on remittances.
Tucked between lines of legal jargon in President Donald Trump’s sweeping new “One Big Beautiful Bill Act” signed into law on the Fourth of July, is a provision with outsized impact on immigrant families: a 1% tax on international money transfers from the United States. Billed as a measure to curb undocumented immigration, the tax has sparked alarm across diaspora communities—especially among Haitians, who rely on remittances as a lifeline for loved ones back home
According to researchers at the Center for Global Development, the tax is likely to impact mainly Mexico, some middle-income countries like China and India, and Latin American countries, including Haiti.
“[The] tax would be likely to reduce remittances sent through formal channels (such as banks and money transfer operators like Western Union by reducing the amount sent, as a portion is diverted towards the tax; and by discouraging remittances altogether,” commented in a blog post on the tax.
Initially proposed as a 5% tax, the rate was reduced to 3.5% in the House version and further to 1% in the Senate draft. The tax applies primarily to cash-based transfers, such as those made with money orders or cashier’s checks, while transfers through U.S. banks or with U.S.-issued debit or credit cards are exempt. Earlier versions of the provisions called for senders who are U.S. citizens to be exempt from the tax — a measure that has since been removed because of implementation complications.
Remittances make up roughly 17 percent of Haiti’s GDP, with more than $3.4 billion sent annually to the country, mainly from the United States.
Remittances from the U.S., in particular, make up the bulk of the money transfers. Of every $10 remitted to Haiti in 2020, at least $8 came from the U.S., according to the authors of an Inter-American Dialogue report, State Collapse and the Protection of Remittance Payments: Haiti in 2024, said.
“I still have to pay my employee, there’s not much I can do other than just accept it,” Pierre Paul, an Amazon warehouse worker based in Connecticut who sends remittances to Haiti, said about the tax in the new bill.
Paul owns a Moncash office, a financial services platform, in Delmas 33 and sends $120 per month to his employee via Remitly or Western Union.
“If it’s one percent, it’s going to have a slight impact. The impact would have felt more if it was six percent,” Paul, 40, continued.
“What can I do? I will have to send the money anyway—my family needs it,” said a woman at a CAM Transfer location at the corner of Flatbush and Newkirk Avenue in Brooklyn, New York who chose to remain anonymous due to privacy concerns.
“I’ll just have to pay the fee. He’s the boss, the president.”
A double tax for Haitians
After years of sending money to Haiti from the United States, a group of Haitians living in the U.S. were the lead plaintiffs in a lawsuit against former president Michel Martelly, Western Union, and others over a $1.50 fee on all international transfers — whether cash or digital — to Haiti.
The move sparked condemnation from advocates, officials and private citizens alike, calling the fee an unofficial tax on the diaspora without parliament’s approval.
The case, filed in 2018 in the U.S. District Court for the Eastern District of New York, accused Martelly, Western Union, CAM, Unibank, Digicel Haiti, and others of conspiring to impose fees on money transfers and phone calls, allegedly under the guise of funding education in Haiti. However, according to court documents obtained earlier this year by The Haitian Times, a federal judge dismissed the case in June 2023, citing a lack of evidence to support the claims of price-fixing or financial mismanagement.
With the $1.50 transfer still in place, Haitians are effectively facing a double tax on remittances, making it more expensive to send money to loved ones back home.
Critics warn that the tax may push more remittance activities into informal channels, making them harder to track and potentially reducing the overall flow of funds to countries like Haiti.
“They know Haitians care deeply for their families—they’re playing on our emotions to make more money,” said a man at a CAM Transfer location on Flatbush Avenue, who also chose to stay anonymous due to privacy concerns. He had just sent $800 to two relatives and said he wires money several times a month.
“For people sending larger amounts, this tax might make them cut back. If someone sends four times a month, maybe now they’ll only send three,” said a clerk at another CAM Transfer location in Flatbush, Brooklyn, who requested anonymity due to job-related privacy concerns..
The provision is set to take effect on Jan. 1, 2026.
Onz Chery contributed to this report.