Why Kenyans Could Receive Less Money Sent By Relatives In US
While it is pitched as a move to fund border security and discourage undocumented immigration, the bill’s ripple effects could hit hard into the financial lifelines that support families across the Global South, including millions of Kenyans.
Marvin Chege 
The administration of United States (US) President Donald Trump has introduced a new legislative proposal that could shake up conversations on global money transfers and leading to Kenyans receiving less money in terms of remittances from those in the diaspora.
Dubbed the “One Big, Beautiful Bill” and championed by conservative lawmakers, this bill proposes a flat 5 per cent tax on remittance payments sent out of the US, with specific exceptions for a section of US citizens.
While it is pitched as a move to fund border security and discourage undocumented immigration, the bill’s ripple effects could hit hard into the financial lifelines that support families across the Global South, including millions of Kenyans.
"This provision imposes a five per cent excise tax on remittance transfers, which will be paid for by the sender of such transfers. The provision requires that the tax be collected by the remittance transfer providers, and the remittance transfer providers are responsible for remitting such tax quarterly to the Secretary of the Treasury," the draft bill read in part.
US President Donald Trump speaks in Atlanta, October 2024. /GETTY IMAGES
Remittances are money transfers sent by people, often immigrants, working in the U.S. to their families back home. The immigrants include Kenyans in the diaspora.
According to the World Bank, Kenya received over Ksh517.32 billion ($4 billion) in remittances in 2023, with the U.S. being the top source.
It is worth noting that these payments are not luxury; they fund basic needs like food, education, healthcare, and housing. So, a 5 per cent tax on these transfers is not just some background policy but a direct hit on the household budgets of countless Kenyan families.
The bill’s structure is intentionally selective. It exempts most U.S. citizens, green card holders, and some visa categories from the tax. However, this also means it likely targets undocumented immigrants or temporary workers—the people most vulnerable economically and legally.
These are often the same individuals sending money back to countries like Kenya. The goal, according to proponents, is to make unauthorised immigration less attractive while generating revenue for border enforcement. It is saying: “If you’re not here legally, we’re taking a cut of the money you’re trying to send home.”
Now, here’s where things get messy. For Kenyans living in the U.S.—especially those on short-term work visas or those without legal status—the 5 per cent tax could feel like a punishment.
Many of them already take on low-paying jobs, send back a huge amount of their income, and live modestly. Now imagine the U.S. government carving out 5 per cent from every dollar sent. That would mean Ksh6,437.50 ($50) taken from every Ksh128,750 ($1,000), before the money that was supposed to buy a sibling’s schoolbooks or pay for a relative’s surgery in Nairobi is sent out.
This will directly impact families that depend on support from relatives in the U.S., as the amount they receive will drop significantly, a matter which could damage Kenya's already-ailing economy.
This move could also drive people to look for underground or informal transfer methods to avoid the tax, which opens up a whole new set of problems.
Informal remittances can be untraceable and unsafe, making it harder for regulators to track financial flows and easier for criminals to exploit the system. So, in trying to clamp down on undocumented immigrants, the bill might end up pushing more financial activity into the shadows.
The bigger picture, economically, is that Kenya’s economy is heavily reliant on remittances, not just as personal income for families, but as a major source of foreign exchange. The Central Bank of Kenya (CBK) tracks this income closely, and it plays a stabilising role for the Kenyan shilling. A significant dip in remittances from the U.S. could interfere with exchange rates, inflation, and even Gross Domestic Product (GDP) growth projections.
In short, the 5 per cent tax could reduce the incentive to send money through legal channels, causing a noticeable decline in overall remittance flows to Kenya.
There is also a psychological toll here. For the Kenyan diaspora—people who work hard to support both their families abroad and back home—this feels like working for nothing. It is essentially telling them, “Your labour is welcome, but your money back home isn’t.” This places an additional financial burden on immigrants who are already paying taxes, contributing to the economy, and sacrificing personal comfort for their families.
In terms of diplomacy, this bill could strain U.S.-Kenya relations. Kenya has long been considered a strategic partner for the U.S. in East Africa, on matters ranging from counterterrorism to trade. Policies that disproportionately affect Kenyan citizens, even indirectly, could create tension.
Kenya might demand more transparency or seek compensation through international channels. If other countries follow suit and start taxing outbound remittances too, we could be looking at a dangerous precedent that disrupts the entire global remittance system.
Supporters of the bill argue that it is about fairness and national security, arguing that it is unreasonable for people to send money abroad without contributing adequately to U.S. systems, especially if they're undocumented.
However, critics point out that the vast majority of remittance senders already pay sales tax, rent, and in many cases, even income tax, despite lacking full legal status. The 5 per cent tax thus ends up feeling like a double penalty, extracting even more from people with the least power to push back.
Bottom line: the “One Big, Beautiful Bill” might sound like a patriotic, problem-solving package to some politicians, but it is deeply flawed when you look at the real-world fallout.
For Kenyans relying on remittances from the U.S., it threatens to choke off a vital stream of support. For the Kenyan diaspora, it adds one more layer of financial stress, and for the U.S. itself, it risks creating more black-market activity while alienating international partners.
