Nigerians sending money home from the United States could soon encounter fresh financial burdens, as U.S. lawmakers propose a 5% excise tax on international remittances.

The draft bill, introduced by House Republicans, seeks to levy the tax on money transfers sent by U.S. residents to recipients overseas a move that could significantly affect Nigeria, one of Africa’s leading recipients of diaspora funds.

According to the Central Bank of Nigeria (CBN), Nigerians received $4.22 billion through International Money Transfer Operators (IMTOs) between January and October 2024. While the exact share from the U.S. remains unspecified, America is known to be a key contributor to these inflows.

The bill reads: “There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer.” The proposed tax would be borne by the sender and collected quarterly by the U.S. Treasury Department.

However, the bill exempts verified U.S. citizens and senders using authorized remittance providers, who would be eligible to claim the amount as a tax credit.

The proposal comes amid a broader policy shift under the Trump administration to tighten immigration and financial controls. Earlier this year, U.S. Immigration and Customs Enforcement (ICE) announced plans to deport nearly two million undocumented immigrants, while former President Trump revived calls to end birthright citizenship.

Economically, the U.S. has also adopted a more protectionist stance, imposing a 14% tariff on Nigerian exports in March. In contrast, diplomatic relations with China appear to be thawing, with recent agreements leading to tariff reductions on both sides.