$15,000 expatriate levy, exploitative, disincentive to investment — NECA

The Nigeria Employers’ Consultative Association (NECA) has described plans by the Federal Ministry of Interior to impose a levy of between US$10,000 to US$15,000 on Nigerian employers, that employ expatriates, as not only exploitative and extortionist but a disincentive to business.

The Director-General of the association, Adewale-Smatt Oyerinde, in a statement issued by the association, stated that while the association is in support of the Federal Government’s objective of developing the local workforce, it however believes that the recently-launched initiative of the Ministry of Interior, at a time the country is actively seeking foreign direct investment (fdi), has the potential of creating ‘more fundamental economic and socio-labour distortions.

“The imposition of US$15,000 and US$10,000 on organizations that employ expatriates at a time when businesses are shutting down and leaving the country in droves is worrisome. Recent results of many businesses have shown massive losses, a situation that could potentially increase the level of unemployment with dire socio-economic consequences,” Oyerinde stated.

He also expressed Organised Businesses’ concern at the legality and appropriateness of the Expatriate Employment Levy (EEL) as well as its effect on the economy, noting that such Handbook can never over-ride clear provisions of extant laws in Nigeria, especially the 1999 Constitution of the Federal Republic of Nigeria, Immigration Act and the Local Content Act, among others.

“The Ministry of Interior and indeed, government cannot impose a tax or levy without appropriate legislation. For instance, Section 59 of the Nigerian Constitution requires that any imposition of tax, duty, fee or levy must be backed by an Act of the National Assembly. Levies that are imposed without complying with the provisions of section 59 of the Constitution offends the Constitution and are illegal,” he argued.

The NECA Boss also observed that existing legislations, such as the Local Content Act and Immigration Act have already addressed objectives similar to those of the EEL Handbook – thus, covering the field, describing the introduction of additional levies as an unnecessary duplication that could impede the ease of doing business in Nigeria.

Articulating the potential impacts of the levy, Oyerinde noted that, if implemented, the levy would not only distort and frustrate the ongoing efforts at clear reform of the fiscal and monetary space but also contradict and render ineffective, the President’s ongoing quest for Foreign Direct Investment.

He added that this could attract a reciprocal implementation of the same policy by other countries, which would have dire consequences on the careers and progress of Nigerians who are expatriates in other nations.

While proposing policy options and recommendations, the NECA Boss urged the government to strengthen existing regulatory institutions responsible for managing expatriate employment rather than imposing additional levies, thus ensuring a more responsive and accountable regulatory framework in the implementation of extant laws.

It will be recalled that the Ministry of Interior recently launched the Expatriate Employment Handbook, where it also announced plans for the ministry to impose a levy of between US$10,000 to US$15,000 on Nigerian employers, that employ expatriates.

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