Court docket provides Inside Minister and AGF ultimatum to defend Expatriate Employment Levy   

A Federal Excessive Court docket in Abuja on Thursday issued an ultimatum to the Minister of Interior, Dr. Olubunmi Tunji-Ojo, and the Lawyer-Normal of the Federation (AGF), Mr. Lateef Fagbemi, SAN, to oppose a swimsuit searching for to halt the Expatriate Employment Levy (EEL) launched by the federal authorities.

Justice Inyang Ekwo directed the officers to look earlier than the court docket and present trigger why the implementation of the expatriates’ taxation regime shouldn’t be completely stopped.

This order adopted an ex-parte movement filed by the Integrated Trustees of New Kosol Welfare Initiative towards the Inside Minister and AGF.

The group alleged that “the proposed taxation regime is an anti-people coverage with radical results on totally different elements of the Nigerian financial system, serving as a chokehold on the nation’s financial development.”   

 Applicant’s Allegations 

In keeping with the plaintiff’s counsel, Paul Atayi, Part 59 of the 1999 Structure forbids the manager arm of presidency from imposing taxes on company our bodies and residents with out legislative approval.

• In an affidavit deposed to by the group’s Programme Implementation Coordinator, Raphael Ezeh, the Federal Authorities of Nigeria unveiled a proposed taxation coverage referred to as the Expatriate Employment Levy (EEL).

“In keeping with KPMG and different on-line data analysts, the Federal Authorities intends to compel all firms and organisations partaking expatriates to pay EEL as follows:   

“For each expatriate on the director stage: $15,000 (N23 million at present change charges) each year.   

“For each expatriate on the non-director stage: $10,000 (N16 million at present change charges) each year,” the affidavit said.

• The group claimed that the levy stipulates penalties for non-compliance, together with 5 years’ imprisonment and/or N1 million for inaccurate or incomplete reporting whereas a company entity’s failure to file the EEL inside 30 days would entice a penalty of N3 million.
• The plaintiff urged the court docket to declare that taxation is a delicate matter requiring collaboration between the manager and legislative arms of presidency underneath the 1999 Structure (as amended).

The Information Company of Nigeria quoted Atayi as saying that the prevailing tax regime is way extra favorable to expatriates than the one proposed by the federal authorities.

“If the defendants usually are not restrained by this honourable court docket, they may begin full implementation of the mentioned programme, thereby threatening the nation’s financial sustainability,” Atayi argued.

What transpired in court docket  

• After listening to from the applicant, Justice Ekwo ordered the plaintiff to inform the defendants of the ex-parte utility and orders inside three days.

“Upon being served, the defendants are hereby ordered to indicate trigger why the prayers of the plaintiff shouldn’t be granted on the subsequent date of listening to,” Justice Ekwo dominated.

• The court docket adjourned the matter till January 16, 2025, for the Minister of Interior and the AGF to reply.

Backstory   

Nairametrics beforehand reported that President Bola Tinubu inaugurated the Expatriate Employment Levy, an initiative of the Federal Ministry of Inside, in February 2024 on the State Home Council Chambers, Abuja.

• The levy goals to bolster income technology, foster job creation for Nigerians in foreign-operated corporations, and deal with the pay disparity between expatriates and native workers.
• The Minister of Interior, Dr. Olubunmi Tunji-Ojo, said that the EEL can be applied by a Public-Personal Partnership (PPP) mannequin, with the Nigeria Immigration Service (NIS) as the first company answerable for its execution.
• Nevertheless, the Nigeria Employers’ Consultative Affiliation (NECA), representing private-sector employers, raised issues that the levy may undermine the Tinubu administration’s fiscal reforms.

In March 2024, the federal authorities quickly paused the implementation of the Expatriate Employment Levy to permit for broader consultations with related stakeholders.