Nigeria’s economy could face a potential setback as United States President Donald Trump’s new bill, dubbed the “One Big Beautiful Bill Act,” is set to introduce a 3.5% levy on money transfers sent by non-US citizens to recipients abroad.
Trump’s new bill, which has already been passed by the US House of Representatives and is awaiting Senate approval, could significantly reduce Nigeria’s $20.93 billion in diaspora remittances, a critical pillar of the country’s foreign exchange earnings, as reported by the Central Bank of Nigeria in 2024.
Pan-Atlantic Kompass reports that in the bill, Trump proposed a remittance tax that targets non-citizens, including those on H-1B and H-2A visas and Green Card holders, who send money to their families overseas.
The tax, set to be deducted at the point of transaction by banks and remittance platforms, is expected to be remitted to the US Treasury quarterly.
This means the proposed tax would affect about 47.8 million immigrants residing in the United States as of 2023, according to the latest American Community Survey from the US Census Bureau.
For Nigeria, which ranks among the top recipients of remittances globally, this tax could result in a loss of approximately $215 million annually, according to estimates.
Aside from the loss, Trump’s new bill proposed no exemption threshold, indicating that even small transfers will be affected.
This could potentially alter the behavior of average senders and impact the financial support that millions of Nigerians rely on.
In Nigeria, where remittances account for a significant portion of the balance of payments, this policy could exacerbate economic challenges, particularly for the poorest households that depend on these funds for basic needs.
Many have begun to argue that the proposed bill could either discourage Nigerians in the U.S. from sending money home or drive them to unregulated money transfer services, fueling black market activities.
Pan-Atlantic Kompass reports also that the new bill has been a major talking point for over a week.
The bill further sparked an outrage after tech billionaire Elon Musk opposed it.
“I’m sorry, but I just can’t stand it anymore. This massive, outrageous, pork-filled Congressional spending bill is a disgusting abomination,” Musk said.
He also argued that the bill’s spending would increase the “already gigantic budget deficit” and “burden American citizens with crushingly unsustainable debt”.
