Mexico | 2026 Begins with New Remittance Tax

Summary

Starting January 1, 2026, remittances sent in cash, money orders, and cashier's checks from the United States will be subject to a 1% tax on the total amount.

Key points

• Key points:
• Remittances to Mexico fell 5.7% in November, marking 8 consecutive months of decline.
• Starting January 1, 2026, remittances sent in cash, money orders, and cashier's checks from the United States will be subject to a 1% tax on the total amount. Remittances funded by bank accounts and credit and debit cards are exempt from the tax.
• 84% of Mexican migrants in the U.S. have bank accounts, and many could avoid the remittance tax. Therefore, this new tax does not pose a risk to Mexico's balance of payments. Migrants from Honduras (65%), Guatemala (72%), and El Salvador (74%) could be the most affected due to their low levels of access to banking services.
• The U.S. Congressional Joint Committee on Taxation (JCT) estimated that it could collect $10 billion between 2026 and 2034 from the new remittance tax. If these calculations prove correct, and given that 3 out of every 10 remittances from the U.S. go to Mexico, it is estimated that Mexicans could end up paying $3 billion in remittance tax between 2026 and 2034.
• The tax may have boosted remittance flows in November and December; even so, the year-on-year growth rate would remain negative. Taking this effect into account, remittances to Mexico are estimated to close at $61.7 billion in 2025, which is equivalent to an annual rate drop of 4.7%.

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