Nigerians receiving money from family and friends in the United States could soon encounter new financial challenges, as US lawmakers consider imposing a 5% excise tax on all international remittances.
The proposal, introduced by House Republicans, aims to tax money transfers sent by US residents to recipients abroad. If passed, the measure could have a significant impact on Nigeria—a leading African destination for diaspora remittances. According to the Central Bank of Nigeria (CBN), Nigerians received $4.22 billion through International Money Transfer Operators (IMTOs) between January and October 2024. While the exact share from the US isn’t specified, it remains a major source of remittance inflows.
The draft bill 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. However, verified US citizens and senders using authorized providers would be eligible for exemptions or tax credits.
The move aligns with broader efforts by the Trump-aligned Republican bloc to tighten immigration and financial oversight. Earlier this year, US Immigration and Customs Enforcement (ICE) announced a deportation list of nearly two million undocumented immigrants, and former President Trump has revived his push to eliminate birthright citizenship.
On the economic front, the US has also adopted a more protectionist stance, including the imposition of a 14% tariff on Nigerian exports in March. In contrast, diplomatic relations between the US and China appear to be thawing, following a recent trade agreement that reduced tariffs on both sides.
