In 2026, the U.S. government will impose a 1% tax on cash remittances sent from the United States to Latin America. Electronic transfers will be exempt, but this measure will increase the cost of traditional remittance methods that many migrants use to support their families.
Experts warn of two important effects this policy could have on Costa Rica. First, regions such as Pérez Zeledón, Los Santos, and the Southern Zone, areas with historically high migration to the United States, could be directly impacted. Many families in these areas rely on remittances to cover basic expenses, so even a small additional charge may strain household budgets.
“Costa Rica is not one of the main remittance recipients in the region, but there are communities where this income carries significant weight. That’s where the impact will be felt most,” explained Leiner Vargas, an economist at the International Center for Economic Policy (CINPE) at the National University.
The effect of the tax will also vary depending on the immigration status of the sender. “The first waves of Costa Ricans who migrated to the U.S. often managed to legalize their status within a decade. This led to the formation of established communities that now attract new migrants,” Vargas added.
However, migrants in irregular conditions face greater challenges and are likely to be the most affected by the tax. “Someone without legal status is excluded from most financial institutions and has limited access to formal systems. That’s where the first layer of exclusion occurs,” he warned.
The second impact experts highlight involves Costa Rica’s regional trade ties. “One of Costa Rica’s main trading partners, and the second most important overall, is Central America,” said economist Luis Vargas. “If this tax reduces income in neighboring countries, it could ripple into Costa Rica’s economy.”
This concern is grounded in numbers. In countries like Guatemala, El Salvador, and Honduras, remittances represent more than 20% of GDP. A drop in that income would slow domestic consumption, which in turn would reduce their demand for Costa Rican products. Currently, about 30% of Costa Rica’s exports go to Central America, making it the country’s second-largest market after the United States.
In addition, Costa Rica is part of the Central American Common Market, a trade bloc that facilitates over 45% of commerce among member countries. If purchasing power across the region declines due to reduced remittances, Costa Rican exports, particularly in food, industrial goods, and manufactured products, could also be negatively affected.
