In addition to threatening foreign reserves, the proposed levy could also disrupt the growing fintech sector that has streamlined cross-border transactions.

Jones Amegbor, founder and CEO of PayInc Group, warned that the 5% tax could “unravel years of work” in building reliable and cost-effective remittance systems, potentially driving transactions underground and away from formal financial oversight.

“We have worked hard to build trust, reliability, and formal rails that protect senders and recipients alike. One can only hope that clearer heads prevail and this bill falls swiftly,” Amegbor said, as quoted by Kenya Wallstreet.

Experts have also raised concerns that the tax would essentially double tax already-taxed migrant incomes and disproportionately impact poorer households that depend on remittances for daily expenses.

This move would conflict with global goals to reduce remittance costs and expand financial inclusion, potentially rolling back years of progress in financial innovation and accessibility.

With the U.S. tightening immigration policies, many Kenyans have been seeking opportunities in other regions, including the Gulf, Asia, and other African countries.

This shift has been driven in part by the need for alternative sources of income, despite ongoing concerns about worker welfare in some of these destinations.

As the bill heads to a critical House vote, the stakes are high for Kenya and other remittance-dependent economies. If passed by May 25, it could be signed into law by early July, potentially changing the financial muscle for millions of migrant workers and their families.