By Lester Hinds/Gleaner Writer President Donald Trump
Members of the Jamaican diaspora in the United States are condemning the new excise tax of one per cent on money remitted to Jamaica, effective December 31 this year.
The one per cent tax is set out in the ‘Big Beautiful Bill’ passed by the US Congress and which was signed into law by President Donald Trump yesterday.
The one per cent tax, described by one diaspora member as a ‘tax on love’ sent to family back home, is set out in the ‘Big Beautiful Bill’ passed by the US Congress. It was signed into law by President Donald Trump yesterday.
Jamaica’s Minister of Finance and the Public Service Fayval Williams told The Gleaner yesterday that the Government will have to wait to assess what impact the one per cent fee could have on the local economy.
“If the sender in the United States absorbs the fee and does not reduce the amount that is sent to the family member in Jamaica, then there may not be an impact. But if the sender deducts the fee and sends the remainder, thus reducing the amount that family member gets in Jamaica, there could be an impact, but it is too early to say,” Williams said.
The minister stressed to The Gleaner that remittances sent to family members are used for school fees and other necessities and, if the amount is reduced to the family member, this could impact the family and, in turn, impact the Jamaican economy.
“There could be some adjustment but it is left to be seen how this plays out,” said Williams.
Jamaicans in the diaspora have come out against the imposition of the new fee.
Dr Robert Clarke, head of Help Jamaica Medical Mission, which undertakes medical missions to the island, said the impact of the one per cent fee could be far reaching and could negatively affect healthcare delivery in Jamaica from a diaspora perspective.
“This is a policy that does not benefit Jamaica and should be rescinded,” he told The Gleaner.
Dr Allan Cunningham, former Jamaica Global Council member, said it was potentially devastating news, especially for poor families who depend on remittances.
“Poorer families are going to feel more economic hardships and children might have it difficult attending schools. No doubt this will have a crippling effect on the country’s economic health,” he said.
He called it a sad day for the Jamaican diaspora.
Dale Holness, former mayor of Broward County in Florida, said the ‘Big Beautiful Bill’ is a harmful plan that could tear families apart and punish hard-working immigrants, especially Jamaicans and others from the Caribbean living in the US.
“I express deep concern over the proposed one per cent excise tax on remittances advanced by the United States government,” he said.
International educator Dr Karren Dunkley said that, while the fee may appear minor on paper, its potential impact on Jamaican families, small businesses, and the national economy will be profound.
“Let us be clear: remittances are not charity – they are survival. They fund school fees, healthcare, groceries, rent, and microenterprises. They are Jamaica’s most direct, reliable foreign investment, totalling over US$3.6 billion in 2024, or roughly 17 per cent of our national GDP (gross domestic product).
“To tax these flows is to penalise sacrifice. It is to burden the very people who, through hard work abroad, have kept families afloat and communities strong. For decades, the Jamaican diaspora has poured resources into our country not just through remittances, but through philanthropy, trade, investment, and advocacy. We do so out of love, not obligation,” she said.
She said the tax is, in effect, “a tax on love”, and it risks disrupting a vital financial artery for thousands of Jamaican households.
Jamaica is expected to experience a direct economic downturn because of the new US remittance tax as it will represent a transfer of resources to the US Treasury (the tax is projected to raise roughly $10 billion in revenue across all countries).
What this means for the Jamaica economy is that, if remittances amount to US$2 billion for the year, the one per cent tax would result in payment of US$20 million to the US Treasury. Jamaica currently receives roughly US$3.3 billion to US$3.5 billion in remittances annually, the majority of which comes from Jamaicans in the US. Remittances currently account for 17 per cent to 20 per cent of Jamaica’s GDP.
The new fee could therefore result in less funds being pumped into the island.
The Bank of Jamaica has already flagged US policy changes on remittances as a downside risk to Jamaica’s economic outlook and, therefore, any reduction in remittance inflows could constrain household consumption, education and healthcare spending as well as small business support in Jamaica, according to an analysis done of the bill’s provision.
In the original version of the bill passed by the US House of Representatives, the tax on remittances had been set at five per cent before the US Senate reduced it by four percentage points.
The new tax will be imposed on remittances sent as cash, money orders, cashier’s cheques and similar such instrument. Funds sent by debit-credit cards or bank wire transfer will not attract the new tax.
According to the provisions of the bill, the new tax will be limited mainly to green card holders – permanent residents – and visa holders. Citizens sending money to relatives in Jamaica will not be subject to the new tax.
US states with high Jamaican populations such as New York and Florida will be impacted the most by the new excise tax.
The fear is that people who rely on cash remittances will try to find other means to send money home to relatives to avoid paying the tax.
This could lead to the use of unregulated means to transmit funds.
For Jamaica, even a small percentage loss in remittance income can have outsized effects. Families use remittances for daily living expenses, education, healthcare, and investing in small enterprises.
“A one per cent tax effectively reduces the disposable income of remittance-receiving households – akin to a new import duty on foreign aid from diaspora. Over time, this could modestly dampen consumer spending and poverty alleviation efforts. Additionally, if migrants reduce the amount they send to offset the fee, local businesses in Jamaica that depend on remittance-fuelled spending may see lower sales. Despite the tax rate being pared down to one per cent, it “could be a setback for financial inclusion” in the region, by nudging transactions outside formal banking channels. This provision is a focal point of concern, as it effectively monetises diaspora earnings and could undermine the vital flow of remittances that sustain many families and stabilise local economies,” stated an analysis provided for a Jamaica Government entity and seen by The Gleaner.
editorial@gleanerjm.com