The United States lawmakers have proposed a bill seeking to impose a 5 per cent tax on remittances sent abroad.
House Republicans released a bill draft on Monday targeting money people send to foreign countries. This could create further strain for immigrant families, including Nigerians who send money home.
Olayemi Cardoso, governor of Nigeria’s central bank (CBN), said diaspora remittances through official money transfer companies reached $4.22 billion between January and October 2024.
However, the CBN didn’t reveal what portion of this money came from the United States.
Under this proposal, verified US citizens could avoid paying this tax and claim it back as a credit.
“There is hereby imposed on any remittance transfer a tax equal to 5 per cent of the amount of such transfer,” the document reads.
“The tax imposed by this 19 section with respect to any remittance transfer shall be paid by the sender with respect to such transfer from the sender and remit such tax quarterly to the Secretary at such time and in such manner as provided by the Secretary.”
However, the bill stated this tax wouldn’t apply to “any remittance transfer with respect to which the remittance transfer provider is a qualified remittance transfer provider and the sender is a verified United States sender”.
This proposal joins several other recent US policy changes.
In January, US immigration authorities identified nearly two million people without legal status for possible deportation.
During that same month, multiple news sources had reportedly found that Trump planned to end birthright citizenship for children whose parents lack legal immigration status.
On March 2, Trump announced new tariffs on all imports to the US, including a 14 per cent tax on goods from Nigeria.
Later, after China increased its tariffs by 84 per cent, Trump boosted US tariff rates on Chinese goods from 104 per cent to 125 per cent, while many other countries faced no increases.
On May 12, the US and China reached a reciprocal deal to lower their tariffs. This agreement reduces US tariffs on Chinese products from 145 per cent to 30 per cent, while Chinese tariffs on US goods drop from 125 per cent to 10 per cent.