US to Impose 5% Tax on Diaspora Remittances: What does it Mean for Kenyans Sending Money from the US?
A new bill introduced by the House Republicans proposed a 5% tax on all international remittances made by non-citizens, marking a significant policy departure.
This provision, under the draft ‘Big Beautiful Bill’, aims to support tax relief measures and fund border security efforts for US citizens.
The remittance tax has stirred concern, particularly among the immigrant community in the United States, including Kenyans sending money home to support their families, education, and long-term financial goals back home.
This tax introduces a new cost variable in cross-border financial transactions, where Kenyans will be taxed $50 for every $1000 sent back home. Whether one is sending monthly allowances, paying for a sibling’s education, or making property investments, every transfer will now be marginally reduced in value.
The levy, if successfully introduced, will be deducted at the point of transaction and applies universally across all legitimate remittance channels, including traditional bank wire transfers and digital remittance platforms.
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