The proposed 5% tax would also violate the U.S.-Mexico Double Taxation Treaty in effect since 1994.

On Friday, Finance Secretary Edgar Amador said that the proposal to impose a 5% tax on remittances violates a tax treaty between Mexico and the United States that has been in effect since 1994.

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“The money sent by migrants from the U.S. to Mexico has already been taxed. If an additional tax were imposed, it would be a case of double taxation and would constitute fiscal discrimination,” he said.

The treaty’s article 25 states that “nationals of a contracting state shall not be subjected in the other contracting state to any taxation or any requirement connected therewith that is other or more burdensome than the taxation and connected requirements to which nationals of that other state in the same circumstances are or may be subjected.”

“Violating the treaty would go against international practices and would likely breach internal U.S. regulations as well,” the Mexican official said, adding that such a tax would therefore be legally challengeable.

Amador noted that 99.1% of remittances sent from the United States are received through electronic transfers. “It’s a fully regulated, legal, transparent market, and one that is completely monitored by authorities in both countries,” he said.

President Claudia Sheinbaum called on Mexicans living in the United States to “write letters to their members of Congress, whether they hold U.S. citizenship or not, saying this tax would be discriminatory.”

The 5% tax on remittances, still under discussion in the U.S. Congress, aims to help fund the tax cuts promised by U.S. President Donald Trump and to support border security initiatives.

The tax on remittances would apply to transfers made by undocumented immigrants, permanent residents, individuals on work visas, or those protected under any immigration benefit. U.S. citizens would be exempt from the levy.

Currently, migrants from various nationalities send approximately US$650 billion to their countries of origin. Of that amount, Mexico receives around US$65 billion annually—equivalent to nearly 4% of its gross domestic product (GDP). The world’s top recipients of remittances are India and Mexico.

In the first quarter of 2025, Mexico received US$14.3 billion in remittances, an increase of 1.3% compared to the same period the previous year.

teleSUR/ JF

Source: EFE

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