Nigerians, others to be affected as US plans 5% tax on remittances

Nigerians, others to be affected as US plans 5% tax on remittances

U.S. lawmakers, particularly House Republicans, have proposed a new bill that would impose a 5% tax on all remittances sent abroad. This measure specifically targets money transfers made by individuals to other countries and is expected to impact immigrant communities, including Nigerians who regularly send money home. In 2024, official remittances to Nigeria through recognized money transfer channels totaled $4.22 billion between January and October, according to the Central Bank of Nigeria, though it did not specify how much came from the U.S.

The proposed legislation exempts verified U.S. citizens from the tax, allowing them to reclaim the amount as a tax credit. The bill requires the sender to pay the tax and remit it quarterly to the U.S. Treasury. Transfers made through certified providers by verified U.S. senders would also be exempt.

This tax proposal comes amid a series of recent U.S. policy moves seen as hostile toward immigrants. Earlier in 2025, U.S. immigration authorities identified nearly two million undocumented individuals for potential deportation, and former President Trump expressed plans to end birthright citizenship for children born to undocumented immigrants. Economically, the U.S. imposed a 14% tariff on Nigerian imports, while escalating and then partially easing tariff battles with China, culminating in a May 12 deal that significantly reduced tariffs between the two nations.