Nigerians Set To Be Affected As US Proposes Tax On Diaspora Money Transfers

In a move that could send shockwaves through immigrant communities, US lawmakers have introduced a draft bill proposing a 5% excise tax on all remittances sent abroad.

Unveiled by House Republicans on Monday, the bill targets financial transfers from US residents to recipients in foreign countries. While the proposed tax would impact immigrant families broadly, it could pose particular challenges for Nigeria, which relies heavily on remittances from its diaspora.

According to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso, Nigeria received $4.22 billion in remittances through International Money Transfer Operators (IMTOs) between January and October 2024 alone. However, the CBN did not specify how much of this amount came from the US.

The proposed legislation states, “There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer.” The tax would be paid by the sender and collected quarterly by the US Treasury Department.

Notably, verified US citizens would be exempt from the tax and could claim verified US senders.

This development is the latest in a series of stringent policies under President Donald Trump’s administration, which has been tightening immigration and trade regulations. In January, US Immigration and Customs Enforcement (ICE) listed nearly two million undocumented immigrants for deportation, and Trump has also renewed calls to end birthright citizenship for children born to non-citizens.

The administration’s tough trade stance has drawn significant global attention. On March 2, the US imposed sweeping tariffs, including a 14% duty on Nigerian exports.

In contrast, tensions between the US and China appear to be easing. A May 12 agreement between the two nations will see US tariffs on Chinese goods reduced from 145% to 30%, while China will lower its tariffs on US imports from 125% to 10%.