Nigerians and other immigrant communities in the United States could be affected by a new legislative proposal that seeks to impose a 5 percent tax on money sent abroad.
A draft bill released by Republican lawmakers on Monday outlines a plan to tax remittance transfers—funds sent from the United States to other countries.
The move, if passed into law, could place a financial strain on immigrant families who regularly send money to support loved ones in their home countries.
According to Olayemi Cardoso, Governor of the Central Bank of Nigeria CBN, diaspora remittances sent through official money transfer channels reached 4.22 billion dollars between January and October 2024.
However, the bank did not specify how much of that figure came from the United States.
The proposed bill states: “There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer.” It further explains that senders will be responsible for paying the tax and must remit it quarterly to the Secretary of the Treasury, following procedures to be set by the department.
However, the bill also outlines some exemptions. Verified US citizens who send remittances through licensed providers may be able to avoid the tax or claim it back as a credit.
The bill clarifies that the tax does not apply to transactions where both the remittance provider is officially recognized and the sender is confirmed as a US citizen.
This new proposal is part of a wider trend of recent policy shifts in the United States that could significantly affect immigrants.
In January, immigration officials identified nearly two million undocumented individuals for potential deportation.
Around the same time, reports surfaced that former President Donald Trump was planning to end birthright citizenship for children born in the US to undocumented parents.
On the economic front, Trump also announced new tariffs in March, including a 14 percent tax on goods imported from Nigeria.
These changes came shortly after China increased its own tariffs by 84 percent, prompting the US to raise its tariff rates on Chinese imports from 104 percent to 125 percent.
Many other countries however did not face similar increases.
