Experts estimate the impact proposed tax on remittances from the US

• The US House of Representatives has passed a instrumentality imposing a 3.4% taxation connected remittances to different countries from the US
• Data shows that determination are 40 cardinal non-US citizens, including greenish paper holders, impermanent workers, and undocumented migrants
• Experts person said that Nigeria stands to suffer astir $215 cardinal successful remittances if the measure crosses each the large hurdles

Legit.ng’s Pascal Oparada has reported connected tech, energy, stocks, concern and the economy for implicit a decade.

The United States authorities is proposing a measure to taxation remittances sent from the state to different countries, including Nigeria, which experts accidental whitethorn airs a setback for the affected countries.

Naira whitethorn depreciate arsenic the US plans to enforce taxes connected remittances. Credit: NOVATIS
Source: Getty Images

The measure seeks to enforce a 3.5% taxation connected remittances and the money sent by migrants to their location countries and mightiness impact astir 40 cardinal non-US citizens, including greenish paper holders, impermanent workers and undocumented immigrants.

Nigeria to suffer $215m successful remittances

According to reports, the measure has passed the US House of Representatives, and if implemented, Nigeria volition suffer astir $215 cardinal successful remittances from the US.

The Guardian reports that migrants successful different countries globally, including the US, often nonstop remittances to their location countries.

These remittances usually travel successful the signifier of currency oregon physics transfers done ceremonial oregon informal channels.

Foreign remittances swell Nigeria’s FX inflows

Nigeria and different African countries beryllium connected these remittances arsenic a root of FX inflow, contributing to their GDPs.

According to information from the Central Bank of Nigeria (CBN), Nigeria recorded implicit $20 cardinal successful remittances successful 2023.

In 2024, Nigeria reportedly received astir $20 cardinal successful overseas remittances, representing 9 per cent of the $19.5 cardinal recorded the erstwhile twelvemonth and was the highest successful 5 years.

The Guardian reports that remittance inflows continue, with Nigeria signaling $325.76 cardinal successful the archetypal 4th of 2025.

The CBN aims to increase monthly remittance inflows to astir $1 cardinal with the instauration of the Non-Resident Bank Verification Number (NRBVN).

Experts foretell doom for the naira

Financial analysts accidental the caller measure could negatively impact the naira’s show successful the overseas speech market.

According to them, overseas remittances are a important contributor to the Nigerian Foreign Exchange Market (NFEM) and are often utilized arsenic a buffer against currency fluctuations and volatility.

“If the measure passes each the hurdles, not lone volition it interaction dollar inflows from the US, but it volition wounded the naira’s performance.” Janet Ogochukwu, a elder banker and an economist, said.

She disclosed that overseas remittances are an intricate portion of Nigeria’s FX inflows and a cardinal contributor to currency stableness successful Nigeria.

Olayemi Cardoso led CBN to mitigate the interaction connected the naira arsenic the US plans to taxation remittances. Credit: CBN
Source: Getty Images

“Now that the naira is connected the emergence against the dollar, the determination could spell doom if not decently handled. But, I judge the CBN is up to the task and volition enactment measures successful spot to mitigate it,” she said.

World Bank lists African countries with the highest remittance

Legit.ng earlier reported that the World Bank has released the global remittance report, ranking India arsenic the state with the astir diaspora remittance successful 2023, with astir $120 billion.

The planetary lender said Africa's apical 10 recipient countries got astir $72.5 billion.

The slope disclosed that determination were somewhat just representations of the antithetic regions among the apical recipients connected the continent, with North African countries ranking among the apical 10.

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Source: Legit.ng