Ghana could lose millions of dollars in future remittance inflows following the passage of a new U.S. law that imposes a 1% federal tax on certain cross-border money transfers.
Signed by U.S. President Donald Trump and dubbed the “One Big Beautiful Act,” the legislation was passed by Congress on July 3, just a day before America’s Independence Day, and is considered one of the most consequential policy shifts in recent years.
The law targets remittance transactions made through cash, money orders, and cashier’s cheques, channels heavily used by African migrants, including thousands of Ghanaians living in the U.S.
Although the new tax will take effect from January 1, 2026, concerns are already growing about its potential impact on households in Ghana that depend on financial support from relatives abroad.
In 2024 alone, Ghana received an estimated $4.6 billion in remittances, with the United States accounting for a significant portion of that total. Africa as a whole received over $92 billion in remittances during the same period, according to the World Bank.
The legislation exempts transfers made through U.S.-issued debit or credit cards and official bank channels. However, many Ghanaians in the diaspora rely on informal methods, cash agents, transfer apps, and money order services. These informal methods now face a new cost burden under the law.
The tax is expected to discourage the use of formal remittance channels, potentially pushing senders toward informal or less traceable methods such as cryptocurrency. This could reduce transparency and increase volatility in cross-border money flows.
Others worry the tax could further reduce remittance volumes, particularly for low-income households who send modest but regular amounts.
This comes at a time when remittances have consistently outperformed foreign direct investment and official development assistance, making them one of the most stable sources of external financing for Ghana.
They fund everything from school fees and medical bills to food and small business start-ups.
The move by the U.S. government, while aimed at boosting federal revenue and tightening oversight of informal financial flows, has triggered concerns of ripple effects across developing economies.
For Ghana, where remittance income plays a critical role in poverty reduction and household survival, the long-term implications could be significant.
