A new bill introduced by US lawmakers may soon see millions of Nigerians living in the United States paying a 5% tax on money they send back home.
The proposed law, revealed in a draft Republican bill on Monday, aims to impose an excise tax on international remittance transfers made by non-citizens. While US citizens will be exempt and allowed to claim tax credits, the burden will fall on immigrants, including many Nigerians.
According to the Central Bank of Nigeria (CBN), Nigeria received \$4.22 billion in diaspora remittances between January and October 2024. Although the exact portion from the US was not disclosed, America remains one of the top sources of remittances to Nigeria.
The new law proposes that the tax be paid by the sender and collected quarterly by the US Treasury Department. However, remittances made by verified US citizens through licensed providers would not be taxed.
This move is part of a broader policy shift under President Donald Trump’s administration, which has taken tough positions on immigration and trade. In recent months, the US has increased deportation efforts, considered changes to birthright citizenship, and imposed tariffs on foreign goods, including a 14% duty on Nigerian exports.
While the US and China recently reached an agreement to reduce trade barriers, concerns remain that the new remittance tax could negatively affect Nigerian families who rely heavily on financial support from relatives abroad.
The bill is still under consideration, but if passed, it could raise the cost of cross-border transfers and affect the flow of remittances into Nigeria.
