The tax, part of the ‘One Big Beautiful Bill Act’ passed by the US House, could cost Nigeria as much as $215m annually in lost value from its $20.93bn remittance market, according to analysts
Nigeria’s foreign exchange earnings from diaspora remittances, which reached a five-year high of $20.93 billion in 2024, are facing a significant threat from new legislation passed by the United States House of Representatives.
The provision, contained in President Donald Trump’s “One Big Beautiful Bill Act,” seeks to impose a 3.5 per cent tax on all international money transfers sent by non-US citizens. If enacted, the tax would apply to all transfers regardless of size, affecting an estimated 47.8 million immigrants in the US, including green card holders.
The Centre for Global Development ranked Nigeria among the top 10 countries most exposed to the proposed tax, estimating it could cost the nation as much as $215 million annually in lost remittance value.
Analysts warn the tax could push senders toward unregulated channels to avoid the extra cost. Speaking to The PUNCH on Thursday, Charles Sanni, CEO of Cowry Treasurers Limited, said the policy would negatively impact Nigeria’s economy. “It will obviously have a way of reducing what would ordinarily come as a flow to Nigeria… This will certainly force senders to seek unofficial channels, which will not be to the advantage of Nigerian reserves and fintechs,” Sanni stated.
This development comes as Nigeria’s Central Bank recently launched initiatives to boost monthly remittances to $1 billion. However, analysts at Barclays Bank noted the bill adds complexity to a sensitive space, warning that, “In the short term, the biggest disruptions may come in cash-based and retail payment channels.”