Donald Trump
The United States Government has proposed a bill that will see Kenyans living in the US taxed for the money they send back home.
The new bill is seeking to slap a five percent excise tax on remittances, or international money transfers, by immigrant workers, including holders of green cards and those with temporary work visas.
“This provision imposes a five percent excise tax on remittance transfers, which will be paid for by the sender with respect to such transfers. The provision requires that the remittance transfer providers collect the tax, and the remittance transfer providers are 43 responsible for remitting such tax quarterly to the Secretary of the Treasury,” read the bill in part.
“The provision also makes it clear that remittance transfer providers have secondary liability for any tax that is not paid at the time that the transfer is made.”
The tax would be implemented by requiring financial institutions and money transfer services to collect the 5% levy at the point of transaction, regardless of the transfer’s amount or purpose.
If the bill is approved, Kenyans living in the US may reduce the amount of money they send back home due to the additional tax burden.
According to the Kenya National Bureau of Statistics (KNBS), remittances from Kenyans living abroad increased by 14 per cent from 591.2 billion Kenyan shillings in 2023 to 674.1 billion Kenyan shillings in 2024. These remittances are the largest source of foreign inflows into Kenya.
Remittances from Kenyans living in the diaspora continue to support Kenya’s current account and foreign exchange market, helping to maintain adequate foreign reserves and making them an integral part of the country’s economy.
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