New Taxes and Regulations Hinder Immigrants' Ability to Send Money to Families in Somalia

The Trump administration's crackdown on Somali money transfers could further destabilize East Africa and fuel more migration, experts warn.

Published on Mar. 10, 2026

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The Trump administration has implemented new taxes and regulations that make it harder for immigrants in the U.S., particularly Somali Americans, to send money to their families in Somalia. The measures include a 1% tax on international money transfers, as well as new reporting requirements for money transfer companies and banks. Experts warn these actions could have the unintended consequence of further destabilizing Somalia's economy and potentially leading to more migration.

Why it matters

Remittances from the Somali diaspora account for a significant portion of Somalia's GDP, providing essential support for basic needs like food, rent, and education. By making it more difficult and costly to send this money, the administration's actions could have far-reaching impacts on the lives of Somalis and the stability of the East African region.

The details

The new measures include a 1% tax on money transfers from the U.S. to foreign countries, as well as a Geographic Targeting Order that requires money transfer companies and banks in two Minnesota counties to report anyone sending $3,000 or more to Somalia. The administration claims this is to investigate potential fraud, but experts say convicted fraudsters have not shown a propensity for sending ill-gotten gains to Somalia. The new rules also come alongside the administration's suspension of U.S. aid to Somalia.

  • The 1% tax on international money transfers went into effect on January 1, 2026.
  • The Geographic Targeting Order took effect on February 12, 2026 and is set to expire on August 10, 2026, though it may be extended.

The players

Donald Trump

The President of the United States who has implemented these new measures targeting money transfers to Somalia.

Scott Bessent

The Treasury Secretary who announced an investigation into Somali money transfer businesses and the new reporting requirements.

Hamdi Issek

A nurse and shop owner at Karmel Mall in Minneapolis who sends money to her family in Somalia each month to cover essentials.

Abdulaziz Sugule

The chairman of the Somali American Money Service Association, who says the new rules show a lack of understanding of the critical role money transfer companies play in Somalia.

Sofia Ahmed

A shop owner at Karmel Mall who says the money she sends to relatives in Somalia is a matter of survival, especially with the suspension of U.S. aid.

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What they’re saying

“We are hardworking people, and most of us worked for what we have.”

— Hamdi Issek, Nurse and shop owner (dnyuz.com)

“Money transfer companies service everywhere in Somalia, including small towns and rural areas where traditional banks don't reach; that's why they are a critical lifeline to the people in Somalia.”

— Abdulaziz Sugule, Chairman of the Somali American Money Service Association (dnyuz.com)

“The unemployment in Somalia is high, and most people (here) support their families.”

— Sofia Ahmed, Shop owner (dnyuz.com)

What’s next

The judge overseeing the case will decide on Tuesday whether to allow Walker Reed Quinn to be released on bail.

The takeaway

This crackdown on money transfers to Somalia highlights the Trump administration's broader efforts to restrict immigration and make it more difficult for immigrants to support their families back home. While framed as an anti-fraud measure, the new taxes and regulations appear to be discriminatory in practice and could have serious consequences for the stability of the East African region.