New U.S. Bill Proposes 5% Tax on Remittances – Nigeria May Lose $1B

Diaspora
Dollars in Danger: U.S. Considers 5% Remittance Tax That Could Hit Nigeria Hard

If you
thought your “Uncle in Texas” was the ultimate financial safety net, Washington
just added a surcharge.

The U.S.
House of Representatives is reviewing a bill that proposes a 5% tax on
remittances sent to over 150 countries including Nigeria.

The bill
may be aimed at border politics, but it could adversely
affect millions
of African households who depend on diaspora cash to survive.

What’s in the Proposed Bill?

The bill introduced
by U.S. Republican lawmakers proposes:

It’s
clearly politics meets payments, but the ripple effects are real.

Nigeria’s Exposure: A ₦32 Trillion
Problem?

Nigeria is Africa’s top
remittance destination, with inflows of $20+ billion annually
A 5% cut means a potential
loss of $1 billion per year
That’s ₦1.6 trillion at
current exchange rates enough to fund a year’s worth of public health
programs

And it’s
not just numbers it’s school fees, rent, medications, and feeding money for
real people back home.

Impact on Remittance Flows

Cost of sending money goes
up → fewer transfers
Informal transfer systems
may spike (hawala, crypto, cash couriers)
Diaspora trust could decline,
especially among Nigerian-Americans already facing steep inflation at home

Why the Diaspora Is Furious

This
feels like a double tax:

Critics
call it “economic punishment for patriotic immigrants” who are building two
economies at once.

Financial Juggernut Insight

Remittances
aren’t luxuries. They’re lifelines.

If this
bill passes, it could destabilize
entire African household economies.

Governments
across Africa especially Nigeria need to: