Nigerians Face Impact as US Proposes 5% Tax on Remittances
Lawmakers in the United States have introduced a bill seeking to impose a 5 percent excise tax on remittances sent abroad, a move that could significantly impact immigrant communities, including millions of Nigerians. The proposed legislation, outlined in a draft House Republican bill released on Monday, targets payments made by US residents to recipients in foreign countries. While the bill broadly affects immigrant families, Nigerians are expected to feel a notable impact, given the country’s reliance on diaspora remittances. Between January and October 2024, Nigeria received $4.22 billion in remittances through international money transfer operators (IMTOs), according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso. However, the CBN did not disclose how much of this total originated from the United States. Under the new proposal, verified US citizens would be exempt from the tax and allowed to claim it as a credit. “There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer,” the bill states. The legislation further clarifies that the tax will be paid by the sender and remitted quarterly to the Secretary of the Treasury. However, it excludes remittances sent through qualified transfer providers by verified US senders. The proposal marks another major policy shift in the US under President Donald Trump’s administration, which has introduced several tough immigration and trade measures in recent months. In January, US Immigration and Customs Enforcement (ICE) identified nearly two million undocumented immigrants for deportation. During the same month, Trump signalled plans to eliminate birthright citizenship privileges for children born to non-citizens. The administration has also taken a hard line on trade. On March 2, Trump imposed sweeping global tariffs on all imports, including a 14 percent duty on Nigerian goods. In response to China’s earlier 84 percent tariff hike, the US raised its tariffs on Chinese imports from 104 percent to 125 percent, while exempting several other nations. However, on May 12, the US and China reached a deal to lower trade barriers, marking a potential end to their protracted tariff war. As part of the agreement, US tariffs on Chinese imports will fall from 145 percent to 30 percent, while China will reduce its tariffs on US goods from 125 percent to 10 percent.
Admin | 2025-05-13 14:17:34