American Desi Diaspora to Get Affected by Remittance Tax Under New U.S. Bill

Date:

USA

American Desi Diaspora to Get Affected by Remittance Tax Under New U.S. Bill. A new legislative proposal introduced in the U.S. House of Representatives is set to affect the South Asian immigrant community. The bill, officially titled The One Big Beautiful Bill, includes a controversial provision that would impose a 5% tax on all remittances sent abroad by non-citizens—including H-1B visa holders, green card holders, and other legal residents who are not American citizens.

If passed, this remittance tax could significantly impact the financial lifeline that lakhs of Desi Americans – Indian, Pakistani, Bangladeshi, Nepali, Sri Lankan, and Afghan immigrants in the U.S. provide to their families back home

The remittance tax proposal is part of the sweeping 389-page legislative package dealing with immigration reform, border security, and foreign aid realignment. While its primary aim is to discourage undocumented immigrants from sending money abroad, critics argue that the measure unfairly penalizes legal, tax-paying residents—many of whom contribute significantly to the U.S. economy.

Data: Remittances Sent from the U.S. to South Asia

According to the latest data from the World Bank (2023 figures):

  • India: Indians in the U.S. sent home $24.4 billion in remittances, the highest among all migrant groups in America.
  • Pakistan: Pakistani expatriates in the U.S. remitted $3.1 billion.
  • Bangladesh: The Bangladeshi community transferred about $2.4 billion from the U.S.
  • Nepal: Nepalese workers and students sent home approximately $1.1 billion.
  • Sri Lanka: Remittances from Sri Lankans in the U.S. totaled around $890 million.
  • Afghanistan: Afghan diaspora contributions stood at approximately $650 million.

Combined, these six countries received nearly $32.5 billion in remittances from the U.S. in 2023. A 5% tax on these funds would mean an estimated $1.625 billion redirected to the U.S. Treasury.

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