The United States lawmakers have proposed a bill seeking to impose a 5 per cent tax on remittances sent abroad.
In a move that could send shockwaves through immigrant communities, lawmakers in the United States have introduced a draft bill proposing a 5 per cent excise tax on all remittances sent abroad.
The bill, unveiled by House Republicans on Monday, targets financial transfers from US residents to recipients in foreign countries.
While it broadly affects immigrant families, the proposed tax poses a challenge for Nigeria, a country heavily dependent on funds sent by its diaspora.
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.
“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.”
The tax would be paid by the sender and collected quarterly by the US Treasury Department.
Verified US citizens would be exempt from the levy and could claim it as a credit.
The bill also exempts remittances sent via authorized providers by verified US senders.