A proposed U.S. remittance tax is raising alarms over its potential impact on Ghanaian households and the broader Ghanaian economy.
Introduced by the Republican-led U.S. House Ways and Means Committee, the legislative package—referred to as “the one, big, beautiful bill”—includes a controversial provision to impose a 5% tax on funds sent abroad from the United States. While most remittance transfers by U.S. citizens would be exempt, the measure would disproportionately affect immigrants, including many Ghanaians residing and working in the U.S.
Remittances serve as a vital financial lifeline for millions of Ghanaian families, providing support for basic needs such as food, healthcare, education, and entrepreneurship. According to the World Bank, the United States accounted for $93 billion in global remittances in 2023, with Ghana receiving over $4.6 billion of that amount.
Economic experts warn that this proposed tax could lead to a decline in formal remittance flows to developing countries. Faced with increased costs, senders may turn to informal or unregulated channels to avoid the 5% levy.
“There’s going to be a black market,” said José Iván Rodríguez-Sánchez, a research scholar at Rice University. “If your relatives need that money and you can’t afford to lose 5%, you’ll find ways to send it under the radar.”
This shift could not only disrupt financial support for families but also weaken formal financial institutions and licensed money transfer services. A reduction in legitimate remittances may result in decreased foreign exchange inflows, putting additional pressure on Ghana’s local currency, the cedi, and compounding existing economic challenges.
Diaspora advocacy groups and financial analysts have expressed strong opposition to the proposal, arguing that it unfairly targets immigrants for assisting their families. Critics contend that the measure may discourage the use of formal financial systems, undermining broader economic development goals.
Though the bill remains under congressional review, the remittance tax provision is expected to face significant resistance from Democratic lawmakers and immigrant communities, casting uncertainty over its approval.
In the meantime, Ghanaians abroad and their families at home are closely watching developments in the U.S. Congress, hoping that a key pillar of their financial stability remains untouched.
Source: Citinewsroom
Comments
Post a Comment