Donald Trump Remittance Tax: Kenyans in US to Pay KSh 3.2b While Sending Money Back Home
- President Donald Trump signed the 'Big Beautiful Bill' into law during the US Independence Day on July 4, 2025
- The new law introduced a 1% remittance tax on money that US residents send abroad to other countries
- Trump's remittance tax could affect the money Kenyans living in the US send back home, where they will be required to pay up to KSh 3.2 billion
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Wycliffe Musalia has over six years of experience in financial, business, technology, climate, and health reporting, providing deep insights into Kenyan and global economic trends. He currently works as a business editor at TUKO.co.ke.
Kenyans living and working in the United States will incur an extra cost to send money back to their families.
Source: Getty Images
President Donald Trump's administration imposed a new 1% tax on remittances sent abroad by individuals living in the US.
What's Donald Trump's 1% remittance tax?
Trump signed the 'Big Beautiful Bill' into law during the US Independence Day on July 4, 2025, which contains the new tax on money transfers from the US to foreign countries.
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How Donald Trump's new 1% tax on diaspora remittances will affect Kenya's economy, shilling
According to CNBC, the tax will apply to money sent from the US via banks, money transfer services and other formal services.
The new tax will take effect in January 2026 and is expected to raise revenue for the US border security and immigration enforcement.
The US Congress reduced the initial proposal of 5%, which could have resulted in immigrants paying more, to 1%.
The 1% tax is the first-ever in the US and could affect millions of immigrant families that rely on the money.
How Donald Trump's remittance tax affects Kenya
In 2024, Kenyans abroad sent home a whopping KSh 640 billion in diaspora remittances.
According to NTV, Kenyans in the US send KSh 320 billion, about half of the total diaspora remittances sent to the country.
Had the US imposed a 1% tax on remittances, Kenyans could have paid KSh 3.2 billion in remittance tax to the Trump administration that year.
More than 100,000 Kenyans work and live in the US, meaning the new tax on remittances could affect thousands of families in the country.
What to know about Trump's Big Beautiful Bill
- The world's richest man Elon Musk expressed his reservations over Trump's comprehensive tax spending cut package under the "Big Beautiful Bill" after his exit from government.
- The Bill introduced “Enforcement of Remedies Against Unfair Foreign Taxes”, dubbed revenge tax, which targets countries imposing unfair taxes on US firms.
Source: Facebook
How Trump's policies affected Kenya's diaspora remittances
Data from the Central Bank of Kenya (CBK) showed that diaspora remittances from the US declined in March 2025.
CBK governor Kamau Thugge noted that diaspora remittance inflows in March 2025 totalled $422.9 million (KSh 54.9 billion) compared to $407.8 million (KSh 52.9 billion) reported in March 2024.
This resulted from 3% drop in US remittances from 56% to 53% during the same period under review.
The US remains Kenya's largest source of remittances, and experts warn that any decline could significantly affect the country's economy.
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
