A new law is set to pass in the United States requiring non-citizens to pay a 5% tax when sending money abroad. Former President Donald Trump had proposed the measure under the name “One Big Beautiful Bill Act.” On Sunday, May 18, the bill narrowly passed the U.S. Congress Budget Committee by a single vote. If enacted, this law would significantly affect thousands of Bangladeshis living in the U.S.

The bill includes provisions for tax cuts, reduced government spending, and enhanced border security. One of its most notable components is the imposition of a 5% tax on remittances sent from the U.S. to other countries, according to a report by NDTV.

The “One Big Beautiful Bill Act” stipulates that all remittances will be taxed at 5%. U.S. banks or service providers will be responsible for collecting the tax and transferring it to the government. If the tax is not paid at the time of the transfer, the service provider will still be held liable.

U.S. citizens and individuals born in the country are exempt from this tax. However, they must provide proof of citizenship and enter into a special agreement with the U.S. Treasury. The bill does not include any tax exemptions based on the amount of money sent, meaning non-citizens will be taxed even on small transfers.

India is expected to be the hardest hit by this proposal, as it receives the largest share of remittances from the U.S. In the 2023–24 fiscal year, India received $118.7 billion in remittances, with 27.7% originating from the United States. Most of this came from Indian nationals working in the U.S. on H-1B and L-1 visas. In fact, over 70% of H-1B visas issued last year were granted to Indian workers.

The bill is now awaiting a full vote in the U.S. Congress. If passed, it could have a profound economic and social impact on the approximately 4.5 million Indians living in the U.S.

According to a report by The Times of India, Indian immigrants in the U.S. will be among the most affected by the proposed remittance tax. Of the 4.5 million Indians in the U.S., 3.2 million are of Indian origin, with many lacking U.S. citizenship. Hundreds of thousands regularly send money home. In 2023–24, Indian-origin residents in the U.S. remitted around $32 billion to India.

Bangladesh has also recently seen record remittance inflows from the U.S. Since January, the U.S. has topped the list for highest monthly remittance totals to Bangladesh. In March alone, Bangladesh received a record $546.13 million from the U.S. Several hundred thousand Bangladesh-origin immigrants reside in the U.S., many of whom are non-citizens. If the proposed tax is implemented, Bangladesh’s remittance-driven economy could suffer. The news has already sparked mixed reactions among Bangladeshi expatriates.

Abul Kalam, a Bangladeshi immigrant who has lived in New York for 15 years and works 10–12 hours daily at a restaurant in New Jersey, sends money home each month. His remittances support his family, pay for his daughter’s education, and cover medical costs for his younger brother. “If this tax is imposed, people like us will suffer the most — and so will our families back home,” he said, expressing deep concern.

Rashida Akhtar, a development activist from Bangladesh, remarked, “Remittances are not just for consumption — they build homes, fund agriculture, and pay for education. Taxing this lifeline will disrupt entire communities.”

A former deputy director of Bangladesh Bank warned that taxing remittances could reduce legal money transfers and drive people toward illegal channels like hundi, which would be dangerous for Bangladesh’s economy.

Latin American countries are also expected to be heavily impacted. In many of these nations, families depend on relatives working long hours in the U.S. for their livelihood. Experts warn that the measure could disrupt economic stability in those regions and also affect the U.S.’s own humanitarian and economic interests.

Manuel Orozco, Director of the Migration, Remittances, and Development Program at the Inter-American Dialogue, said, “Any move to reduce remittances ultimately harms the U.S. itself. These funds are vital lifelines for families in poor towns and villages where job opportunities are limited. If these lifelines shrink, more people may be driven to cross the U.S. border illegally.”

However, supporters of the tax argue that it would help pressure undocumented immigrants and generate revenue for the government.
Mark Krikorian, Executive Director of the Center for Immigration Studies, stated: “People come to the U.S. primarily to work and send money home. If that becomes more difficult, the incentive to migrate here will decrease.”