How the US remittance tax actually lands across the Caribbean

What happened. With the 1% US transfer tax now in effect, the Inter-American Development Bank sized the exposure: of US-bound Caribbean remittances, the Dominican Republic receives the most ($23.8B), followed by Haiti ($9.8B), Jamaica ($7.2B), Guyana ($3B) and Trinidad & Tobago ($722M). Barbados is small enough (~$94M in 2025) that its authorities don’t separately publish the data. The IDB’s read: because the tax hits cash transfers and exempts bank- and card-funded ones, the direct hit may be limited — though analysts still model roughly a 1.6% drop in flows.

Why this matters to you. Exposure is wildly uneven. Jamaica, where remittances run close to a fifth of GDP, feels any squeeze hardest; for Trinidad and especially Barbados, remittances are a minor line. So the “remittance tax panic” lands very differently depending on which island you send to.

The decision. The entire game is the cash-versus-bank distinction. A counter cash transfer is taxed; the same money funded from a US bank account or US-issued card is not. For Jamaica-bound senders in particular, moving to a digital, bank-funded channel both dodges the 1% and usually beats storefront fees. The tax is real but largely avoidable — if you change how you pay, not whether you send.

Compare bank-funded transfer costs in our Compare Remittances tool.

— TWB Newsroom