NECA, CPPE Raise the Alarm over FG’s 750% Additional Levy on Expatriate Employment

Dike Onwuamaeze

The Nigeria Employers’ Consultative Association (NECA) and the Centre for the Promotion of Private Enterprise (CPPE) have expressed concerns over the additional levy of $10,000 and $15,000 per expatriate staff and director respectively imposed by the federal government.

These levies were in addition to the existing $2,000 paid annually by organisations employing expatriates.

The additional levy was contained in the Expatriate Employment Handbook launched recently by the federal government through the Federal Ministry of Interior ostensibly to enhance skills transfer in Nigeria.

Both organisations contended that the additional levy would be a disincentive to foreign direct investments (FDI), hurt companies that have billions of dollar investments that required expatriates as critical staff and imperil the vision of African Continental Free Trade Area (AfCFTA) because it has no exception for African expatriates. 

The Director General of NECA, Mr.  Adewale-Smatt Oyerinde, in a statement yesterday, titled, “Ministry of Interior’s Expatriate Employment Levy: A Disincentive to Investment,” described the levies as exploitative, extortionist, and a contradiction that could not be explained at a period the federal government is campaigning for FDI into the country.

Oyerinde warned that, “the imposition of $15,000 and $10,000 on organisations 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.”

He added: “We are concerned at the legality and appropriateness of the EEL as well as its effect on the economy. The provisions of a handbook can never over-ride clear provisions of extant laws in Nigeria, especially the 1999 Constitution of the Federal Republic of Nigeria, the Immigration Act and the Local Content Act among others.”

According to him, “the Ministry of Interior and indeed, the federal 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 offend the Ccnstitution and are illegal.”

He contended that “existing legislations, such as the Local Content Act and the Immigration Act have addressed objectives similar to those of the EEL Handbook – thus, covering the field.

“Therefore, the introduction of additional levies is an unnecessary duplication that could impede the ease of doing business in Nigeria.”

Oyerinde, noted that a reciprocal implementation of the same policy by other countries would “have dire consequences on the careers and progress of Nigerians who are expatriates in other nations.”   

Speaking in the same vein, the Chief Executive Officer of CPPE, Dr. Muda Yusuf, expressed serious concerns about the unintended consequences of the additional EEL, adding that the time line for its compliance is too short.

Yusuf said: “The policy gave barely four weeks for companies to comply.  For such a major policy shift, companies needed to be given minimum of six months.  It is only fair and just to do so. This would be very disruptive for their businesses, plans and projections.

“Some of the companies affected are major investors that have investment running in billions of dollars and have been in Nigeria for decades.  

“The country needs more direct investors than portfolio investors at this time. The economy needs more investors in the real economy such as oil and gas, manufacturing, infrastructure, mining, ICT, Healthcare that require varying skills and competencies.

“It is imperative to give some consideration to this class of investors, given the scale of their investments which could be in billions of dollars.”

He also warned that policy could trigger reciprocal actions from other countries, which would have serious implications for diaspora Nigerians.   

“There are currently over 17 million Nigerians in various countries around the world doing extremely well in the fields of education, medicine, health, sports, media, entertainment, leadership, politics, finance, science, ICT, transportation, tourism, industry and agribusiness.

“This is a pool of very valuable external sector assets for us as country. We have the largest diaspora population in Africa.  We also have the highest diaspora remittances on the continent, generally in excess of $20 billion. All of these could be at risk as a result of this policy,” he said.

Yusuf, added that this policy, which did not “make an exception for our African brothers and neighbours, is coming at a time when the African Continental Free Trade Area (AfCFTA) is gaining traction.

“This policy could be a major setback for the continental economic integration vision.”  

He advised the government to use the policy to fight the influx of foreigners, especially the unskilled ones that are more pronounced, in vulnerable sectors like construction, distributive trade, hospitality and logistics.  

The CPPE also appealed to government to review the policy and undertake broader consultation to ensure that “we do not hurt genuine investors in the country.”