At a Glance
- A 1% tax on cash and check remittances to Mexico starts Jan. 1.
- Mexico received $62.5 B in 2024, 3.5% of GDP.
- Remittances fell 5.5% Jan-Sept 2024 vs prior year.
- Why it matters: Families sending money face a new fee that could shrink cross-border flows.
SAN DIEGO (News Of Austin) – As part of President Trump’s “One Big Beautiful Bill,” a 1% tax on cash and check remittances to Mexico and other countries will take effect on Jan. 1. Mexico’s national bank, Banxico, reported that the country received $62.5 B in 2024, representing 3.5% of its GDP. The tax has already sparked a counter-response from Mexico’s president.
New Tax Takes Effect
The tax applies to cash and check transfers but not to online money. It is set to be enforced from Jan. 1, and analysts predict it could reduce remittances by about 1.6%.
- 1% tax on cash and check remittances.
- Cash and check transfers only; online money exempt.
- Effective Jan. 1.
- Expected 1.6% drop in remittances.
Western Union official said:
> “the new tax will likely lead to a drop in remittances by approximately 1.6 percent.”
Mexico’s Counter-Move
President Claudia Sheinbaum has introduced a government-backed bank card, Finabien, to allow Mexican nationals in the U.S. to send money electronically without the tax.
Claudia Sheinbaum said:
> “It’s a simple way to send money electronically without paying the cash penalty,” she says.
- Daily limit of $2,500.
- Monthly limit of $10,000.
- Flat $2.50 transaction fee.
Remittance Trends
Banxico data shows remittances between January and September fell 5.5% compared to the same period last year.
| State | Drop % (Jan-Sept 2024 vs prior year) |
|---|---|
| California | 9% |
| Texas | 3% |
California, the largest source of U.S. funds, saw a 9% decline, while Texas dropped 3%.
Key Takeaways
- A 1% tax on cash remittances begins Jan. 1.
- Mexico’s Finabien card offers a tax-free alternative with daily and monthly limits.
- Remittance flows already fell 5.5% in the first nine months of 2024.
The tax and Mexico’s Finabien card illustrate how policy shifts can reshape cross-border money flows.
