Remittances to Mexico are on the rise

People in the United States are sending more money to their friends and relatives in Mexico.

Remittances to Mexico sent by people in the United States to friends or family in Mexico were up 6.3 percent in January compared to the same period last year, reported the country’s central bank, Banxico.

Remitters sent more money per transfer and made more transfers than a year ago. In January, Banxico recorded 6.962 million operations, compared to 6.465 million in 2016.

President Trump has suggested taxing or impounding remittances as a way to make Mexico pay for his proposed border wall.

Remittances are an important source of foreign revenue for the country; Banxico reported $26.9 billion was sent in 2016.

In 2015, remittances became the main source of foreign currency in the country, surpassing oil revenue, foreign investment, tourism and manufacturing exports.

The money tends to flow to the country’s poorest regions, where people have more relatives who have migrated to the United States.

Remittances tend to be at their lowest in January and at their highest in May.

Remittances are not taxed because they are transfers of previously owned money rather than payments for goods or services. Mexico does not tax receptors of remittances, as long as the transfers are for less than a pre-determined amount.