Donald Trump Remittance Tax: Kenyans in US to Pay KSh 3.2b While Sending Money Back Home

Kenyans living and working in the United States will soon face an additional cost when sending money back home, following a new 1% remittance tax signed into law by US President Donald Trump.

Dubbed the ‘Big Beautiful Bill’, the legislation was enacted on July 4, 2025, during US Independence Day celebrations. It introduces a 1% tax on all international remittances from individuals residing in the US, aiming to fund border security and immigration enforcement initiatives.

The tax, set to take effect in January 2026, applies to all money transfers abroad—including those made via banks and licensed money transfer services—according to CNBC. The original proposal was a 5% tax, but Congress reduced it to 1% following pushback.

This marks the first time such a tax has been imposed in the US, and it is expected to affect millions of immigrant families, including over 100,000 Kenyans living in the country.

In 2024, Kenyans abroad remitted KSh 640 billion, with half—approximately KSh 320 billion—coming from the United States. Under the new policy, this would translate to a KSh 3.2 billion tax on Kenyan remittances to the homeland.

Economic experts warn that the tax could strain households in Kenya that rely heavily on diaspora support, especially amid rising inflation and high living costs.

CBK data shows that diaspora remittance inflows dropped slightly in March 2025, with Kenyans sending home $422.9 million (KSh 54.9 billion), down from $407.8 million (KSh 52.9 billion) in March 2024. The US share of Kenyan remittances declined from 56% to 53% in that period.

The ‘Big Beautiful Bill’ also includes retaliatory trade measures, such as the “Enforcement of Remedies Against Unfair Foreign Taxes” clause—dubbed the “revenge tax”—targeting countries that impose what the US views as unfair taxation on American companies.

Tech billionaire Elon Musk has expressed reservations about the bill, citing concerns about its long-term impact on international business and innovation.

As the law’s implementation date approaches, thousands of Kenyan families could see their monthly support reduced, unless senders increase their transfer amounts to offset the new tax.

In other news:Banks Pocket Sh13 Billion More from MSMEs Driven by Higher Interest Rates – CBK

Donald Trump Remittance Tax: Kenyans in US to Pay KSh 3.2b While Sending Money Back Home