In a move that could deeply impact Nigerian families, United States lawmakers have introduced a bill proposing a 5% tax on all international money transfers, including remittances sent from the US to countries like Nigeria.
The draft legislation, presented by House Republicans, seeks to impose an excise tax on remittances sent abroad by US residents. According to the proposal, the sender would bear the cost of the tax, which would be collected quarterly by the US Treasury Department.
This development is especially concerning for Nigeria, a country that relies heavily on diaspora remittances to support millions of households. Between January and October 2024, Nigeria received $4.22 billion through International Money Transfer Operators (IMTOs), according to CBN Governor Olayemi Cardoso. While the Central Bank did not disclose how much of this came from the US, analysts believe a large chunk originates from Nigerian immigrants residing in America.
Key Details of the Proposed Bill:
- 5% excise tax on remittances sent to foreign countries.
- Exemptions for verified US citizens and remittances sent through authorized channels.
- The tax is not applicable if the sender is a US citizen and the provider is approved.
- The funds will be collected quarterly by the US Treasury.
- Implications for Nigerians and the Diaspora
If passed, this policy could significantly reduce the amount of money received by Nigerian families from loved ones abroad. For many Nigerians, these funds are crucial for education, healthcare, rent, and daily survival.
This bill is part of a wider series of aggressive policies under former President Donald Trump’s administration, which has seen a renewed focus on immigration control, trade restrictions, and fiscal enforcement.
In January, ICE (US Immigration and Customs Enforcement) announced a crackdown on nearly two million undocumented immigrants, while Trump also reignited efforts to end birthright citizenship.
US-Nigeria Trade Tensions and China Relations
Further straining ties, the US recently imposed a 14% tariff on Nigerian exports. In contrast, tensions with China seem to be easing. A May 12 agreement saw US tariffs on Chinese goods reduced from 145% to 30%, while China agreed to cut tariffs on American imports from 125% to 10%.
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As Washington strengthens its economic and immigration measures, Nigerians living in the US may soon be forced to rethink how they send money back home.
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