The United States Congress passed the “Big, Beautiful Bill,” which President Donald Trump signed into law on Friday. The Senate sharply reduced a controversial tax on remittances, money sent abroad by immigrants from an initial 5 percent proposal to 3.5 percent, and finally to 1 percent, easing the burden on money transfer businesses. However, the tax’s scope has expanded to include all Americans sending money overseas, including U.S. citizens, whereas previously it applied only to visa holders and permanent residents.
By Aria Deemie with New Narratives
The tax is part of a broader domestic policy bill aimed at raising revenue by taxing international money transfers sent from the United States. For countries like Liberia, where remittances are a critical economic lifeline, the tax’s impact could be significant. Liberia remains highly dependent on remittances, which account for nearly 20 percent of its gross domestic product—one of the highest rates in Africa. In 2023, Liberians received approximately $800 million in remittances, roughly equal to the country’s entire national budget.
Liberia’s Finance Ministry agreed to an interview but was unavailable at the scheduled time, citing a change in schedule. No further comment was provided by press time.
Despite lowering the tax rate, the nonpartisan Joint Committee on Taxation now estimates the 1 percent tax will raise nearly $10 billion, far more than previous projections for the 3.5 percent rate. Experts say the lower rate is likely to encourage compliance and reduce efforts to avoid the tax.
Isaac Success Yomah, who manages a money transfer bureau just outside Monrovia, called the Senate’s revision “much more modest” than earlier versions.
Isaac Success Yomah in his Bureau outside Monrovia, where he helps manage money transfers from the U.S. to Liberian families.
“The fact that it now applies to everyone sending money out of the U.S., not just immigrants, may reduce some political resistance,” Yomah said.
Asked if remittance flows would remain steady, he said, “Probably yes — mostly. But the added 1 percent cost, though small, is still real. I expect many senders, especially those on tight budgets, may reduce amounts or delay transfers until the tax takes effect, likely in January 2026. Some might turn to informal channels, as we’ve seen before.”
Yomah expressed concern about the tax’s impact on small businesses like his. “Wallets and remittance hubs often make a small margin on transfers, not 1 percent, but any added friction can deter customers. Even a slight drop in volume could hurt revenue. We may see less foot traffic over time.”
He also warned of a possible rise in informal transfers. “A 1 percent tax might not stop everyone, but shifting to informal channels has precedent, especially with taxes targeting non-citizens. It’s about cost, friction, and trust. Some may explore cash couriers, mobile wallets, or cryptocurrencies.”
Customer awareness of the tax remains low, he said. “I’ve had very few questions, most haven’t realized it yet. Those who asked were concerned about timing and how the fee applies, not the tax itself. That’s expected before the law takes effect.”
William H. Dassin, a Monrovia-based economist, welcomed the tax reduction but warned that even a 1 percent levy will have significant consequences for Liberian households and remittance businesses.
“The reduction looks good, from 3.5 percent to 1 percent. But even that 1 percent will have a serious negative impact,” Dassin said. “Households will have to adjust spending due to likely lower remittance amounts. Remittance businesses won’t just lose revenue; their customer base will shrink.”
He explained that senders who usually remit monthly might reduce frequency to avoid the tax. “Some may send every three months or just once. Recipients will see fewer transactions.”
Karn Jeremy, a Liberian student in the United States who frequently sends money home, said the tax’s impact on long-term U.S. residents and citizens might vary.
“Africans, including many naturalized U.S. citizens, use Sendwave and similar services a lot,” Jeremy said. “For U.S.-born citizens who don’t regularly send money abroad, this tax won’t affect them much. But for those of us sending money home, whether immigrants, naturalized citizens, or students it’s going to be okay. The lower tax rate will help reduce the stress of high transfer fees.”
This story was a collaboration with New Narratives. Funding for the story was provided by the American Jewish World Service which had no say in the story’s content.
