MEXICO CITY — Remittances sent to Mexico dropped 4.6 percent in May compared to a year earlier, according to central bank data published on Tuesday, as the United States prepares to implement a tax on the money sent by workers to their families back home.
The figure for May hit some $5.36 billion, the accumulation of some 13.9 million transactions averaging $385 each. While the size of each transaction edged up compared to the same month last year, the number of transactions dropped some 5.7 percent.
Mexico, the world’s second-largest recipient of remittances after India, receives remittances chiefly from workers in the US, where the Senate recently softened plans to tax these transfers.
The proposed budget making its way through US Congress now calls for a 1 percent tax on remittances when they are made in cash.
Earlier drafts of the legislation called for taxing all remittances 3.5 percent, a plan Mexican officials said violated a tax treaty between the two countries because, they said, it amounted to double taxation, as the remittances are already subject to local taxes in the US
While Mexican officials seemed relieved the bill had been amended, President Claudia Sheinbaum said that if signed into law, her government would announce a program to reimburse the 1 percent lost to the US tax.
“Look at the love our migrant brothers and sisters have for their families and for Mexico,” Sheinbaum said at her morning press conference on Tuesday. “No matter what the circumstances, they always support their families.”
