Nigerians to be affected as US moves to tax diaspora money transfers
In a move that could send shockwaves through immigrant communities, lawmakers in the United States have introduced a draft bill proposing a 5 per cent excise tax on all remittances sent abroad.
The bill, unveiled by House Republicans on Monday, targets financial transfers from US residents to recipients in foreign countries.
While it broadly affects immigrant families, the proposed tax poses a challenge for Nigeria, a country heavily dependent on funds sent by its diaspora.
Between January and October 2024 alone, Nigeria received $4.22 billion in diaspora remittances through International Money Transfer Operators (IMTOs), according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso.
However, the CBN did not specify what portion of these funds originated from the US.
“There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer,” the proposed legislation states.
The tax would be paid by the sender and collected quarterly by the US Treasury Department.
Verified US citizens would be exempt from the levy and could claim it as a credit.
The bill also exempts remittances sent via authorized providers by verified US senders.
This development is the latest in a series of tough measures under President Donald Trump’s administration, which has recently ramped up its immigration and trade policies.
In January, US Immigration and Customs Enforcement (ICE) listed nearly two million undocumented immigrants for deportation, while Trump also renewed calls to end birthright citizenship for children born to non-citizens.
The administration’s aggressive trade stance has also drawn global attention.
On March 2, the US imposed sweeping tariffs, including a 14 percent duty on Nigerian exports.
However, tensions between Washington and Beijing appear to be easing.
A May 12 agreement between the two economic giants will see US tariffs on Chinese goods drop from 145 percent to 30 percent, while China will slash its own duties on US imports from 125 percent to 10 percent.
