Sending money from the US just got more expensive

Published: 07 July 2025

Zimbabweans living in the United States will now have to dig deeper into their pockets to send money back home after the US Senate approved President Donald Trump’s 1% tax on international remittances.

The new tax means that for every US$100 sent abroad, an extra US$1 will be charged - effectively increasing the cost of supporting families and communities back home. The move, a key component of Trump’s immigration control strategy, is aimed at discouraging migration by taxing cross-border financial support.

Trump has long argued that taxing remittances will reduce incentives for immigrants to enter or stay in the United States illegally. However, critics have slammed the tax as punitive and harmful to diaspora communities and developing nations that rely heavily on remittance inflows.

Zimbabwe, which receives billions annually in remittances from its global diaspora, stands to be significantly affected. According to the Reserve Bank of Zimbabwe (RBZ), the United States is the country's third-largest source of remittances after South Africa and the United Kingdom.

In 2023, remittance inflows from the US contributed a substantial portion of the US$1.8 billion Zimbabwe received overall, helping to cushion families from economic hardship, fund education, support health care, and finance small-scale investments.

Diaspora organisations have expressed concern over the impact of the new tax, warning that it could reduce the amount of money sent to families and slow the flow of foreign currency into the Zimbabwean economy.

Economists say while a 1% levy might seem small, it adds up significantly for regular senders and receivers, especially during times of global economic uncertainty.

The new tax will apply to all outward money transfers from the US to other countries, and financial service providers are expected to adjust their systems to accommodate the charge in the coming weeks.
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