A new proposal from the Trump administration to impose a 5% tax on international remittances has triggered growing alarm among African communities and financial analysts, who warn of potential economic shocks in several countries heavily reliant on funds from their diaspora.
The plan, introduced by Republican lawmakers, would apply the tax to money transfers made by non-U.S. citizens, including green card and visa holders. U.S. citizens would be exempt, but millions of legal residents who routinely send money to family abroad could be affected. Under the proposed bill, the levy would be collected from the sender and paid quarterly to the U.S. Treasury.
Remittances are more than a personal financial tool—they are lifelines for millions of households across Africa.
In 2023 alone, African nations received an estimated $100 billion in remittance flows, which accounted for roughly 6% of the continent’s GDP.
Countries like Ghana, Nigeria, and Kenya are especially vulnerable to any disruption in these inflows, as families use them for basic needs such as education, healthcare, rent, and food.
Critics say the tax could force many senders to turn to informal channels to avoid the added cost, undermining financial transparency and increasing the risk of fraud and money laundering.
Some analysts also fear that the measure could push already vulnerable migrant families into financial distress and possibly drive undocumented migration as people seek new ways to support relatives back home.
