Draft U.S. remittance tax law dilutes rates, spares card transfers

• The ‘One Big Beautiful Bill Act’ draft reduces remittance tax to 1% from 3.5%.

• Remittances made from bank accounts, financial institutions, or using debit or credit cards are exempt.

• The 1% tax applies only to remittances made in cash, a money order, or a cashier’s cheque.

• The tax is paid by the sender and applies only to remittances made with cash, a money order, a cashier’s check, or similar physical instrument.

• Remittances made from an account held in or by a financial institution and funded with a debit or credit card issued in the U.S. are exempt from the tax.

• The bill was passed by the U.S. House of Representatives in May.