The US House of Representatives bill, which has imposed a 5% tax on remittances sent abroad by non-citizens, could significantly impact African countries, according to Techpoint Africa. “The One Big Beautiful Bill” was passed on May 22, 2025, by the US House of Representatives, backed by President Donald Trump, which includes a provision imposing a 5% excise tax on remittances sent abroad by non-citizens.
The bill intends to create revenue and highlight immigration concerns by targeting outbound money transfers from non-citizens, including people with green cards and temporary visas.
How the bill could affect African nations
Techpoint Africa reported that the tax could affect several African countries that received over $90 billion in remittances in 2024. Nigeria, Egypt, and Kenya are the countries at the top, with Nigeria receiving $5.7 billion from the US in 2021 alone. Remittances are essential for funding education, healthcare, and small businesses across the continent.
A depletion in funds can have broader economic implications. Due to the proposed tax, African fintech startups that enable cross-border money transfers, such as LemFi, NALA, Kuda, and Moniepoint, could experience operational challenges.
The bill’s requirement for money transfer operators to confirm the immigration status of senders and apply a tax credit mechanism for US citizens could expand compliance burdens and operational costs for these fintechs. The bill is waiting for consideration in the US Senate. If it passes, it could become law by July 2025.
The remittance space in Africa
Nigerians abroad send home between $20 billion and $25 billion annually in remittances, according to the World Bank. Business Day reported that global remittances to Nigeria increased by 9% in 2024 to $20.98 billion, with the diaspora in the UK playing a significant role.
Kenya’s remittance market is growing rapidly, with inflows reaching nearly USD 5 billion in 2024, according to the Central Bank of Kenya (CBK).
Image: Nappystock
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