U.S. President Donald Trump speaks with the media accompanied by gamers of the Juventus soccer crew, within the Oval Workplace of the White Home in Washington, D.C., U.S., June 18, 2025.
REUTERS/Nathan Howard
Come Dec. 31, 2025, each greenback despatched by Caribbean nationals to their households in Jamaica, Dominican Republic, Haiti, and the remainder of the Caribbean area shall be topic to a 1 % tax enhance, including to the roughly 6% in charges charged by cash switch firms.
That is due to the “One Massive Stunning Invoice Act,” which Congress handed final weekend in Washington and which President Donald Trump has now signed into legislation.
Within the unique stage of the plan to implement this tax enhance, it was anticipated to be a 5 % hike, however after a Senate negotiation, it was ultimately decreased to 1 %.
Whereas the tax will apply considerably to cash-based transfers, cash orders, cashier’s checks, and related devices, it notably exempts financial institution wire, debit, bank card funds, and most digital remittance providers. The tax enhance will primarily have an effect on inexperienced card holders, everlasting residents, and visa holders. US residents sending cash to their respective international locations is not going to be topic to the brand new payment; nevertheless, the perfect suggestion is to confirm together with your cash switch firm.
Communities in the US with important Jamaican populations, reminiscent of New York and Florida, will really feel an important impression. Monetary consultants warn that senders who depend on money transactions, particularly older migrants, or these with out entry to financial institution providers, might battle to keep away from the brand new tax. Others will discover digital platforms or direct financial institution transfers to bypass the added value.
It’s also said that though the implementation of the tax fee was decreased from the preliminary 5 %, even a modest payment might threaten monetary inclusion within the Caribbean, at kitchen tables, which might generate and encourage transactions outdoors the formal banking system.
Dr. Allan Cunningham, a former Jamaican Diaspora International Council member, described the event as a devastating blow, notably for low-income households who rely on remittances to fulfill fundamental wants. “Over time, this might dampen client spending, restrict poverty discount efforts, and stress small companies that rely closely on remittance purchases,” he instructed Caribbean Life.
“That is painful information for our communities. Poorer households will face even larger financial hardship, and a few kids might discover it harder to remain at school,” Dr. Cunningham warned. “There is no such thing as a query it will place extra strains on households,” Dr. Cunningham added.
Based on experiences, a 1 % tax successfully reduces the disposable revenue of remittance-receiving households. The impact guarantees to be notably crushing for Caribbean households.
The implications for the Jamaican economic system are important; this switch of sources to the US Treasury is projected to gather US$10 billion from related transaction worldwide.
The announcement has sparked sturdy opposition from diaspora members and Brenda Hunter, who sends remittances month-to-month to Jamaica to offer healthcare for her sister in Clarendon. It’s devastating.
Remittance firms targeted on the Caribbean are adjusting operations however haven’t but commented on the brand new tax announcement.
