Kenyans living and working abroad sent home Sh325.4 billion in the first half of this year, a 5.8 percent increase from the same period in 2024, even as a new tax law in the United States threatens to make future remittances more expensive.

Data from the Central Bank of Kenya (CBK) shows that remittances rose to $2.519 billion in the six months to June, up from $2.379 billion recorded over a similar period last year.

This increase comes ahead of a major policy shift in the US, Kenya’s biggest remittance source, where a new law signed this month introduces a 3.5 percent excise tax on cross-border money transfers starting January 2026.

The tax will apply to non-commercial transfers, such as money sent by Kenyans in the US to family members back home, and could see senders lose tens of billions of shillings annually to taxation.

In May alone, cash from the US accounted for 57 percent of Kenya’s total remittances. While the June share from the US was not disclosed by the CBK, last year alone, inflows from America reached $2.63 billion (Sh339.8 billion), reaffirming its position as Kenya’s top remittance partner.

The decision by the US government, under President Donald Trump, to introduce the new tax comes alongside a push to tighten immigration rules. This includes stricter measures that could see an increase in deportations of undocumented migrants, a move that may affect remittance patterns in the coming months.

Since 2015, remittances have remained Kenya’s biggest source of foreign income, surpassing revenue from tourism, foreign direct investments, and agricultural exports such as tea and coffee.

Most of the funds sent by Kenyans in the diaspora are used to support families and for investments in sectors like real estate, offering a lifeline to many households and stimulating economic growth. The Kenya Kwanza administration has also been pushing for more labour export opportunities to address rising unemployment within the country.

The new US tax on money transfers stands in sharp contrast to earlier global efforts to ease the cost of remittances. These past efforts recognised the role of diaspora funds in supporting economic growth in less developed nations. However, the Trump-led administration has argued that the US has for too long shouldered a disproportionate burden under its “America First” policy, signalling a shift in approach towards international financial flows.

The US remains the leading source of diaspora cash for several countries, including Kenya and India, making the new tax a matter of concern not just for senders, but also for the many economies that rely heavily on these transfers.