Cash wired into the country by Kenyans living and working abroad rose by 5.8 percent to $2.519 billion (Sh325.4 billion) during the six months to June ahead of new United States legislation that introduces taxes on such transactions starting next year.
The remittances grew from $2.379 billion (Sh307.4 billion) recorded in the same period last year, latest data from the Central Bank of Kenya shows.
A new law in the US, the largest source of remittances to Kenya, was signed earlier this month and introduces a 3.5 percent excise tax on such cash transfers starting January 1, 2026.
The new tax will see Kenyans pay tens of billions of shillings per annum for the money they send home. The tax is applicable on non-commercial transfers of money from people working in the US to people abroad (for instance, family members).
Besides the new tax, America is also intent on cracking down on illegal immigration in what could see a surge in deportation of migrants.
The US diaspora remittances contribution stood at 57 percent in May 2025. The CBK did not indicate the share from the US in the June update. Inflows from the world’s largest economy amounted to $2.63 billion (Sh339.8 billion) last year.
Since returning to power in January this year, President Donald Trump has pursued policies that have sent shockwaves across global economies, impacting livelihoods including those of immigrant workers.
Since 2015, remittances have remained the largest source of foreign cash inflows into Kenya, ahead of tourism, foreign direct investment (FDI), and the export of agricultural products such as tea and coffee.
The money sent by Kenyans living abroad goes to support relatives and fund investments in real estate among other sectors of the economy.
The Kenya Kwanza administration has been keen to send more Kenyans to work in foreign countries amid increased unemployment in the domestic market.
The new tax by the US on remittances reverses earlier efforts to make such transactions cheaper and faster in recognition of the role of remittances in fuelling growth of countries with low development.
The Trump administration introduced the tax as part of its "America First" policy, seeking to end what it sees as decades of being taken advantage of by the rest of the world. America is the largest source of remittances for many countries including India.
