In a move that could send shockwaves through immigrant communities, including millions of Nigerians, lawmakers in the United States have introduced a draft bill proposing a five per cent excise tax on all remittances sent abroad.

The bill, unveiled by House Republicans on Monday, targets financial transfers from U.S. residents to recipients in foreign countries. The proposed legislation, outlined in a draft House Republican bill released, targets payments made by U.S. residents to recipients in foreign countries. While the bill broadly affects immigrant families, Nigerians are expected to feel a notable impact, given the country’s reliance on diaspora remittances.

Between January and October 2024, Nigeria received $4.22 billion in remittances through international money transfer operators (IMTOs), according to Central Bank of Nigeria (CBN) Governor Olayemi Cardoso. However, the CBN did not disclose how much of this total originated from the United States.

Under the new proposal, verified U.S. citizens would be exempt from the tax and allowed to claim it as a credit. “There is hereby imposed on any remittance transfer a tax equal to 5 percent of the amount of such transfer,” the bill states.

The legislation further clarifies that the tax will be paid by the sender and remitted quarterly to the Secretary of the Treasury. However, it excludes remittances sent through qualified transfer providers by verified U.S. senders.

The proposal marks another major policy shift in the U.S. under President Donald Trump’s administration, which has introduced several tough immigration and trade measures in recent months.

In January, U.S. Immigration and Customs Enforcement (ICE) identified nearly two million undocumented immigrants for deportation. During the same month, Trump signalled plans to eliminate birthright citizenship privileges for children born to non-citizens.