THREE years ago Margaret suffered a back injury that forced her to stop working. Since then, her only source of income has been money she receives twice monthly from her daughter, who has been living and working in the United States for the past 15 years.

Margaret, a senior citizen who lives in Kingston and who did not want to be photographed, is one of many Jamaicans who rely on remittances to survive. In recent weeks they have grown increasingly concerned, given the new tax slapped on remittances from the United States by the Donald Trump Administration.

The remittances tax, a provision of Trump’s ‘One Big Beautiful Act’, is scheduled to take effect in December this year and Margaret, like other Jamaicans, acknowledges that, while it will cut the funds they receive from relatives, they are thankful that it will be only one per cent.

That is one dollar of every US$100 and US$10 of every US$1,000 sent.

“It has to stretch, yeah, yeah, yeah. It has to stretch. It has to stretch to pay the little rent and buy the little food. That’s the main source and so forth, nothing else. Thank God for [my daughter],” Margaret told the Jamaica Observer just after collecting a transfer at a busy plaza and slowly making her way down the stairs.

“I stopped working three years ago and [my daughter, who is a US citizen] maintains me, so I have to depend on it. I haven’t really started collecting any pension yet, because I stopped working because of illness,” Margaret explained, emphasising that she must make do with what she gets now and is extremely grateful.

Margaret, who is not yet 65, said she was told she will have to wait another year before her National Insurance Scheme (NIS) pension payments will become available to her.

“I haven’t gotten anything from NIS yet and so I have to depend on [my daughter] and pray that there’s [no more tax]… She works hard, in the summer, the heat… I feel it for her,” Margaret told the Sunday Observer.

In the lead-up to the June 16, 2025 observation of International Day of Family Remittances, the United Nations said that, “Over the past decade, migrants have sent US$5 trillion in remittances to low- and middle-income countries, exceeding official development assistance and equalling foreign direct investment. More than one-third of these funds have reached rural areas, where they count the most.”

Senior economics lecturer at The University of the West Indies, Mona, Dr Andre Haughton explained that while the one per cent tax may seem minuscule, the effect can only be truly assessed with a wider scope.

Remittances sent to Jamaica between January and April 2025 alone totalled US$1.04 billion, and for the calendar year 2024 the total sent to the country was US$3.3 billion with around 65 per cent of that generated from the US, according to the Bank of Jamaica.

Pointing to those stats, Haughton said, in total Jamaica stands to lose at least US$22 million to the tax, which could pose several issues.

“Most of the money that comes in as remittances is for medical care or consumption. So it’s going to reduce consumption in some instances. The Government now has a safety net to [provide]. Jamaicans who are not on PATH [Programme of Advancement Through Health and Education] depend on their persons abroad. Remittances act as a safety net to help keep them above the poverty line. So we have to take these things into consideration as well. It’s very important,” he argued.

“This is going to push people to move away from the traditional way of sending money to try and find decentralised ways of sending money, like with cryptocurrency, Bitcoin, et cetera,” he said.

Using remittance estimates from the World Bank, the Center for Global Development (CGD), a non-profit think tank based in Washington, DC, and London, listed Jamaica as number 11 of 15 countries that stand to lose the most money from the one per cent tax, estimating losses much higher, up to US$80 million.

The CGD says that its estimates included not just the direct loss of cash diverted to the one per cent tax, but any ensuing reduction in the sending of remittances, plus any potential fee increases from remittance companies to make up the shortfall.

When the think tank looked at the countries whose gross national income — the total amount of money earned by a country’s residents — would be worst hit by the money lost from the tax, Jamaica was listed as number three, superceded only by El Salvador and Honduras.

Haughton, though, thinks that Jamaica can regroup and recover from this blow.

“President Trump is looking to earn from immigrants, and that is the policy stance that he has been pushing. So now, locally, we have to become less and less dependent on remittances for our foreign currency inflow. The Government must diversify our revenue earnings from abroad… We cannot wait on remittances to be our number one foreign currency generator. We have to find other innovative ways to earn foreign currency,” he said.

In 2024 the Bank of Jamaica reported that remittances for the year totalled US$3.37 billion, while Jamaica Tourist Board data showed that tourism raked in US$4.3 billion.

That thought, though, is not central in the minds of Margaret and other Jamaicans with whom the Sunday Observer spoke.

“We can’t fight it still. [Trump] could have said more but he only said one per cent,” said Margaret, who shared that her daughter had wanted her to come live with her in the US, but she declined the offer as she is not “foreign-minded”.

Reflecting on the potential decrease in cash until her pension comes in, Margaret said, “I can’t do better, I’m still going to get a little something, so I have to give God thanks.”

Another woman, who declined to be named, told the Sunday Observer that she wasn’t too concerned for herself but knew there would be blowback for others.

“It’s their country and they have a right to implement whatever rules and regulations, but as it relates to persons that use remittance services on a regular basis, they’re going to feel a pinch because things are going up, and it’s back-to-school time,” she said.

An elderly man, whose children are overseas, said, “A lot of people live off remittances… So it’s going to affect them in a great way. Because the less money in your pocket, the less money to spend, and the cost of living is high already. So it’s not a win-win for poor people.”

One young woman, who said she receives remittances often, was not happy with the US legislation.

“Honestly, I don’t agree with it because…if we ask a foreign for money and they [already] don’t have it, the little that they’re sending, this a go just make it shorter. So I don’t agree with it at all,” she told the Sunday Observer.

Her disappointment was shared by a young man who argued that the tax “doesn’t make any sense”.

In 2024 the Bank of Jamaica reported that remittances for the year totalled US$3.37 billion.

HAUGHTON…most of the money that comes in as remittances is for medical care or consumption. So it’s going to reduce consumption in some instances

Observer staff reporter Dana Malcolm (left) listens as Margaret explains that her only source of income is remittances from her daughter, a US citizen.