New 1% Remittance Tax Worries African Families Abroad

A new 1% tax on money transfers abroad is set to take effect in the new year, raising concerns among immigrant families who rely on remittances as a financial lifeline.

For Edidiong Chrys, a 38-year-old second-generation Nigerian American and university student, the change could have profound consequences. She says the funds she sends to relatives in Nigeria—sometimes more than 50 times a year—support everything from medical care for her grandmother to school fees for her uncle’s five daughters.

“We regularly send money home to support loved ones, including our elders, children in school, newborns, and others in need,” Chrys said. “When I do get a chance to send money home, sometimes I’m spending it from my refund check.”

Remittances form a crucial flow of funds for families across Africa. In 2023, people living in the United States sent an estimated $98 billion abroad, according to the World Bank. Sub-Saharan Africa received $56 billion from diaspora communities worldwide, surpassing bilateral foreign aid in countries like Liberia, where remittances tripled direct U.S. support.

Critics argue that the tax, passed under President Donald Trump’s legislation, will not only strain diaspora families but also weaken development ties between the U.S. and Africa.

“This is just another obstacle to partnership and development,” said Witney Schneidman, a senior fellow at the Brookings Institution’s Africa Growth Initiative. “When you add it up with visa blockages, the end of AGOA, and the end of USAID, the U.S. is building a wall between itself and Africa.”

Hilda Suka-Mafudze, the African Union’s outgoing ambassador to Washington, warned that taxing remittances could undo years of progress. “Diaspora remittances are lifelines for millions of African families,” she said. “They cover essentials like food, school fees, and medical care. To impose a tax on that is deeply unjust.”

The Center for Global Development, a nonpartisan think tank, has also flagged the policy as a setback for developing nations, particularly in light of recent cuts to U.S. foreign aid.

The political pushback has already begun. Democratic lawmakers Sheila Cherfilus-McCormick of Florida and Jonathan L. Jackson of Illinois have introduced the African Diaspora Investment and Development Act (AIDA), which seeks to reverse the tax’s impact and create more transparency in transfers.

“I strongly oppose any effort to tax remittances,” Cherfilus-McCormick said. “H.R.4586 — AIDA intends to reverse course and instead focus on leveraging the nearly $100 billion diaspora communities send home each year to build sustainable partnerships.”

For families like Chrys’s, the issue is not abstract. She says even modest transfers go a long way in Nigeria, paying for doctors, nurses, school tuition, and food.

“In the U.S., it might feel like, ‘Oh, that’s nothing,’” she said. “But in Nigeria, it’s everything, because every little money counts.”