US Congress reveals the reason for 5% tax on diaspra remittances

• The US House of Representatives is proposing a 5 per cent taxation connected each remittances sent abroad
• The caller measure targets fiscal outflows from US residents to recipients abroad, including Nigeria
• Experts accidental if successful, the measure volition interaction Nigeria’s overseas speech inflows done diaspora remittances

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

The United States person introduced a measure proposing a 5 per cent excise taxation connected each remittances sent abroad.

The measure was unveiled by the US House of Representatives connected Monday, May 12, 2025, targeting fiscal transfers from US residents to recipients abroad.

CBN politician Olayemi Cardoso's slope whitethorn combat hard to gain much FX via remittances. Credit:CBN/NurPhoto/Contributor
Source: Getty Images

Nigeria records $4.22bn inflows from the diaspora

Experts person said that the measure volition impact Nigeria’s overseas speech inflows from the US, arsenic it heavy relies connected diaspora remittances.

According to information from the Central Bank of Nigeria (CBN), betwixt January and October past year, Nigeria received astir $4.22 cardinal successful diaspora remittances via International Money Transfer Operators (IMTOs).

The apex slope did not, however, disclose the percent of the funds that came from the US.

Exemptions nether the caller bill

Vanguard reports that the sender would wage the tax, and it would beryllium collected quarterly by the US Treasury Department.

However, the projected measure states that verified US citizens would beryllium exempt from the taxation and could assertion it arsenic a credit.

It besides exempts remittances sent done authorised channels by verified US senders.

The improvement is the latest among pugnacious measures nether President Donald Trump, which has accrued the tempo of his migration and commercialized policies connected non-citizens.

Reports accidental that in  January 2025, the US Immigration and Customs Enforcement (ICE) listed astir 2 cardinal undocumented immigrants for deportation, portion Trump intensified calls to extremity birthright citizenship for children calved to immigrants.

CBN launches BVN level for Nigerians successful diaspora

Trump's sweeping planetary tariffs person been wide criticised aft imposing levies connected exports to the US, including a 14% tariff connected Nigerian goods.

The improvement comes arsenic CBN officially launched the Non-Resident Bank Verification Number (NRBVN) platform.

The level was developed successful collaboration with the Nigeria Inter-Bank Settlement System (NIBSS) to unlock fiscal access, marking a important milestone successful Nigeria’s fiscal inclusion journey

The naira volition impacted arsenic the US Congress mulls taxation connected remittances. Credit: Picture Alliance/Contributor
Source: Getty Images

The caller level is simply a bold determination to region the hassles for Nigerians overseas from obtaining their BVNs.

Forex inflow to Nigeria declines

Legit.ng earlier reported that overseas speech inflows to the Nigerian Foreign Exchange Market (NFEM) declined successful April, showing the effect of the planetary tariff warfare and uncertainties caused by falling lipid prices.

The driblet was reportedly caused by a 16.5% diminution successful foreign-sourced inflows to $657.4 million, the lowest since October 2024.

Also, overseas portfolio investments declined by 15.7%, portion inflows from different corporates fell by 40.5%. According to reports, section sources, which accounted for 82.1% of full inflows, besides recorded a flimsy diminution of 2.9% to $3.02 billion.

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Source: Legit.ng