United States lawmakers have introduced a new bill seeking to impose a 5 percent tax on international remittances, a move that could significantly impact millions of immigrant families, including Nigerians who rely heavily on diaspora inflows.
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The draft legislation, released Monday by House Republicans, proposes an excise tax on remittance transfers made by U.S. residents to foreign nations. While aimed at tightening fiscal policy and immigration controls, the bill is already generating concern over its potential to burden low-income earners and disrupt financial support lifelines across borders.
“There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer,” the bill reads, adding that the tax would be paid by the sender and remitted quarterly to the U.S. Treasury.
The legislation, however, carves out an exemption for verified U.S. citizens. According to the draft, individuals who can prove U.S. citizenship would be eligible for a tax credit equal to the amount paid, effectively refunding the levy.
The bill states that the tax “shall not apply to any remittance transfer with respect to which the remittance transfer provider is a qualified provider and the sender is a verified United States sender.”
Though the Central Bank of Nigeria (CBN) has not provided a country-specific breakdown, it disclosed that diaspora remittances through international money transfer operators (IMTOs) reached $4.22 billion between January and October 2024. A significant portion of these remittances is believed to originate from the United States, home to one of the largest Nigerian diaspora populations.
Analysts say the proposed tax could discourage formal remittance channels and push transactions underground, reducing transparency and cutting off a vital source of foreign exchange for Nigeria.
The proposed remittance tax is the latest in a series of tough U.S. policy moves targeting immigration and global trade. In January 2025, the U.S. Immigration and Customs Enforcement (ICE) identified nearly two million undocumented immigrants for deportation.
Former President Donald Trump, during his campaign and subsequent political activity, had also floated revoking birthright citizenship for children born to undocumented immigrants.
In the area of trade, the U.S. introduced sweeping tariffs in early 2025, including a 14 percent tariff on Nigerian exports. On March 2, further tariff hikes were announced, notably increasing import duties on Chinese goods to 125 percent, before a May 12 deal with Beijing reduced tariffs on both sides — a de-escalation hailed as a turning point in U.S.-China economic relations.
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