Trump wants to tax migrants’ transfers. Africa will lose billions
The new tax will hit migrants in the USA. Transfers to Africa can be charged with a 5 % tribute if the Trump project enters into force.
The administration of Donald Trump presented a new regulation assuming the introduction of a 5 % tax on private monetary messages directed abroad. The new proposal, already adopted by the House of Representatives of the US as part of the statutory package known as the “great, beautiful law”, was directed to consider by the Senate. Its main goal is to fulfill the election promises of the former president, including maintaining tax breaks from his previous term.
Load for migrants
According to tax experts, the extension of discounts may lead to an increase in the budget deficit, which is why as part of compensation, new sources of income for the state were proposed – one of them is the tax on foreign transfers made by migrants. The project predicts that the tribute will not cover US citizens, but will affect about 46 million migrants, including people in the country illegally.
The African diaspora will be particularly vulnerable. Migrants from Africa, living in the USA, transfer huge sums to their families – it is estimated that about $ 13 billion in African countries goes to African countries annually. Only in 2021, $ 5.7 billion was sent to Nigeria, 1.8 billion to Egypt, and 1.2 billion to Kenya.
New tax
The new tax can significantly reduce this stream of money. For many families in Africa, funds sent by relatives from abroad are a key source of income. The introduction of a fee may therefore have direct social and economic consequences for entire regions.
Trump’s proposal appears in a broader context of the fight against illegal financial flows. In January, the US concluded an agreement with Nigeria regarding the return of $ 53 million taken over by the FBI in connection with cases of corruption. This money was part of a larger amount, reaching over $ 100 million, used to purchase real estate and luxurious goods in the USA.
Transparency International in its report from last year estimated that almost $ 4 billion had sailed as a result of corruption from Africa. The organization stipulated that these are only confirmed cases, which suggests that the scale of the phenomenon can be even greater.
