In a move that could send shockwaves through immigrant communities, lawmakers in the United States have introduced a draft bill proposing a 5 per cent excise tax on all remittances sent abroad
The bill, unveiled by House Republicans on Monday, targets financial transfers from US residents to recipients in foreign countries.
While it broadly affects immigrant families, the proposed tax poses a challenge for Nigeria, a country heavily dependent on funds sent by its diaspora.
Between January and October 2024 alone, Nigeria received $4.22 billion in diaspora remittances through International Money Transfer Operators (IMTOs), according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso.
However, the CBN did not specify what portion of these funds originated from the US.
“There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer,” the proposed legislation states.
The tax would be paid by the sender and collected quarterly by the US Treasury Department.
Verified US citizens would be exempt from the levy and could claim it as a credit.
The bill also exempts remittances sent via authorized providers by verified US senders.
This development is the latest in a series of tough measures under President Donald Trump’s administration, which has recently ramped up its immigration and trade policies.
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