REMIT Act Blocks Federal Taxes on Money Transfers Unless Treasury Certifies No Criminal Benefit

The Remittance Expense Minimization and Integrity for Transfers Act (REMIT Act of 2025) is essentially a new rulebook on how the federal government can tax the money transfer industry. This bill starts by acknowledging that remittances—the money people send home across borders—are huge, totaling over $500 billion globally, and are crucial for fighting poverty in many countries (SEC. 2).

But here’s the policy pivot: The REMIT Act clamps down on the Treasury Department’s ability to impose new excise taxes or fees on any “money transmitting business.” The federal government cannot levy a new tax or fee unless the Secretary of the Treasury first certifies two things to Congress (SEC. 3). First, the Secretary must confirm the tax or fee won’t actually make it easier for criminals to launder money or commit other financial crimes. Second, they must certify that the tax or fee won’t place an “unfair or excessive burden” on the businesses themselves.

The Fine Print: Protecting the Underground Economy?

The bill’s findings section spends a lot of time highlighting the problem of money laundering. It points out that when the government tries to regulate or tax these transfers, people just move to unregulated, anonymous Informal Value Transfer Systems (IVTS), which are loved by drug cartels and professional money laundering groups like Chinese Money Laundering Organizations (CMLOs) (SEC. 2). The logic seems to be that taxes drive transfers underground, benefiting criminals.

However, the definition of a “money transmitting business” that is protected from these taxes is incredibly broad. It covers licensed companies, but it explicitly includes those running “informal money transfer systems or any network that helps people move money domestically or internationally without using regular banks” (SEC. 3). This is where things get interesting. The bill identifies IVTS as a major criminal risk, but then extends tax protection to them. If the government wanted to impose a targeted fee to fund better oversight of these risky informal networks, this bill could block it if the Treasury Secretary decides the fee is too burdensome.

Real-World Friction: Who Benefits and Who Pays?

For regular people sending money home—say, a construction worker sending $300 to family overseas—this bill could be good news. If the government is prevented from imposing new taxes on transfer companies, those savings might be passed on, keeping remittance fees lower. This directly supports the bill’s stated goal of helping families who rely on these funds.

But the catch is the restriction on the federal government. Excise taxes are often used to fund specific regulatory activities or simply raise general revenue. By requiring the Treasury Secretary to certify that a tax won't aid criminals or be an “excessive burden,” the bill gives the Secretary significant power to veto potential taxes. This could limit the government's ability to fund necessary oversight or regulation of the very businesses—especially the informal ones—that the bill identifies as high-risk for money laundering. It’s a classic trade-off: lower costs for consumers, but potentially less regulatory flexibility for the feds.