The United States is considering a new bill that could significantly impact Nigerians and other immigrants sending money home. A proposal put forward by House Republicans aims to introduce a 5% tax on all remittance transfers made from the US to foreign countries. While the bill offers exemptions for verified US citizens, many Nigerian immigrants—especially those without legal status—are likely to be affected, increasing the financial burden on families relying on funds from abroad.
According to Central Bank of Nigeria Governor Olayemi Cardoso, diaspora remittances through official channels hit $4.22 billion between January and October 2024. Although the data didn’t specify how much of this total came from the US, it’s well-known that the US is one of the top sources of remittances to Nigeria. This makes the proposed tax particularly concerning for the Nigerian economy and households dependent on foreign income.
The bill stipulates that the 5% tax would be paid by the sender and remitted quarterly to US authorities. However, those classified as “verified US senders” using qualified money transfer services would be exempt. Critics argue that such policies unfairly target undocumented immigrants and low-income earners, who often send money back home for basic needs like education, healthcare, and food.
This remittance tax proposal comes amid a wave of policy shifts under the current US administration. Since January, US immigration enforcement has ramped up efforts to deport nearly two million undocumented individuals. Additionally, former President Trump announced plans to end birthright citizenship for children of undocumented immigrants and introduced sweeping tariffs on foreign imports, including a 14% levy on Nigerian goods.
While the US and China recently reached a truce on their escalating tariff war—cutting mutual tariffs significantly—this remittance tax underscores the broader shift toward protectionist and nationalist policies. For Nigerians abroad, particularly those without citizenship, it could mean choosing between supporting loved ones and facing financial penalties.
Source: Business day