Nigerians returning home from the U.S. may soon face new financial obstacles as U.S. lawmakers propose a 5% excise tax on all international remittances.
A draft bill proposed by House Republicans would impose taxes on transfers sent by U.S. residents to foreign recipients. The proposal, if passed, would greatly affect Nigeria, one of the highest recipients of African diaspora funding.
Nigerians received $4.22 billion in remittances through the International Remittance Operator (IMTO) between January 2024 and October 2024, according to the Central Bank of Nigeria (CBN). While it is not clear how many of these are specifically from the United States, the country remains the main source of these inflows.
The bill states that “the tax on any remittance is equal to 5% of the amount of such transfer.” The tax will be paid by the sender and collected quarterly by the U.S. Treasury Department.
It is worth noting that verified U.S. citizens will be exempt from taxation and allow the sender who is verified using authorized providers to treat it as credit.
The move is part of a broader trend under the Trump administration’s tightening of immigration and financial regulations. Earlier this year, U.S. Immigration and Customs Enforcement (ICE) listed nearly 2 million undocumented immigrants for deportation, while Trump updated his efforts to end reproductive citizenship.
In the economic sector, the United States has also adopted a tough stance, including a 14% tariff on Nigerian exports in March. Meanwhile, diplomatic tensions between the United States and China appear to be easing after a recent agreement significantly lowered both sides’ tariffs.
