Remittance alert

Jamaicans in the diaspora and at home are bracing for a negative impact on the country’s people and economy should Republicans in the United States (US) House of Representatives go ahead with plans to impose a five per cent tax on remittances from the US.

The proposal is contained in a 389-page tax bill on which hearings are currently being held.

House Republicans have included in President Donald Trump’s big priority bill a five per cent excise tax on remittance transfers that would cover more than 40 million people, including green card holders and non-immigrant visa holders, such as people on H-1B, H-2A and H-2B visas. US citizens would be exempt.

The money transfer companies, such as Western Union, Jamaica National Money Transfer, GraceKennedy Financial or the banks, would be responsible for collecting the fees.

Trump also recently said that he was finalising a presidential memorandum to “shut down remittances” sent by people in the US illegally.

Jamaicans in the diaspora have described the proposed tax as bad and a betrayal of immigrant communities.

Reacting to the proposal, Dr Karren Dunkley, former Jamaica Global Diaspora Council member, called the taxing of remittances not just bad economics but “a betrayal of our shared humanity”.

“The proposal to tax remittances directly threatens the economic lifeline of millions of families across the Caribbean. For Jamaica, where remittances account for nearly 20 per cent of GDP, this policy would have devastating ripple effects – fuelling poverty, destabilising households, and weakening the vital link between diaspora communities and their homeland,” she said.

In 2024, remittances to Jamaica totalled some US$3.6 billion and is the largest foreign exchange contributor to the Jamaican economy. The US accounted for US$2.34 billion of those remittances.

Earl Jarrett, head of Jamaica National Group and one the money transfer companies that handle remittances to Jamaica, told The Gleaner that the tax could affect the entire country.

Jarrett, who said Jamaicans may have to seek other methods to remit funds to the island, noted that his company is looking at the possibility of developing an app through which Jamaicans could send remittances.

He further noted that the company would also look at its money transfer fee structure, if it comes to that.

The JN Group head suggested that Jamaica needs to lobby Washington to ensure that the propose tax does not take effect.

In a statement to The Gleaner, GraceKennedy Money Services, said it was taking the proposed tax on remittances very seriously and was keenly monitoring developments and working with its international partner, Western Union, to assess any potential impact on its business.

“If implemented, the tax would increase the cost of sending money for non-US citizens. While GraceKennedy Money Services fees are determined by our partner, together we remain focused on expanding more affordable and accessible solutions for our customers. In this context the potential remittance tax, digital solutions like out GK-One app could help offset some of the increased costs by providing a more economical alternative to traditional transfer methods,” the statement said.

GraceKennedy said it was taking the proposed US remittance tax very seriously.

The group noted that, by encouraging digital adoption, it was helping to make it cheaper and more convenient for clients to continue supporting loved ones in Jamaica.

editorial@gleanerjm.com