A newly proposed bill in the United States aims to introduce a 5% tax on remittances sent by non-citizens to countries abroad. If passed, this could significantly impact the over $21 billion in yearly remittances Nigeria receives from its diaspora.
The bill is designed to generate revenue by taxing money transfers made by individuals who are not U.S. citizens or nationals. This includes millions of immigrants who send money back to their families, including Nigerians living in the U.S.
If the law is enacted, sending money from the U.S. to Nigeria could become more expensive. Many Nigerians rely on these funds for rent, food, school fees, medical bills, and small business support.
Economic experts warn that this added cost may lead to a drop in formal remittance flows. Some may begin using unofficial money transfer channels to avoid the tax, which could increase risks and reduce financial transparency.
A sharp decline in remittances would affect millions of Nigerian families. It could also lower the country’s foreign exchange reserves and slow down growth in key sectors like real estate, education, and commerce — all of which depend heavily on diaspora support.
Remittances remain one of Nigeria’s top sources of foreign exchange, second only to oil revenue. With inflation and unemployment still rising, any drop in these inflows could make life harder for many.
As the proposed bill makes its way through U.S. legislative stages, many Nigerians at home and abroad are watching closely. Advocacy groups are already voicing concerns, calling the bill unfair and harmful to struggling families in developing countries.
For now, no final decision has been made. But if the bill becomes law, it may bring new challenges for families who rely on every dollar sent from loved ones abroad.
