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FG’s Expatriate Employment Levy Threat To Ease Of Doing Business – NECA

LAGOS  – The New Expatriate Employment Levy (EEL), imposed on expatriates employed in Nigeria by the Federal Government is creating unsettle effects between the Organised Private Sector(OPS), and the government, and will create further encumbrance to the ease of doing business efforts of the Federal Government . 

Besides, there are fears that the levy will create bottlenecks for intending foreign investors. 

Already, the Nigerian Employment Consultative Association, (NECA) expressed its aversion to the levy in a letter to the Federal Government.

Daily Independent gathered that, in the letter on the economic and legal implications of the expatriate employment levies, and request for a meeting with the Federal Government, the Association called for the withdrawal or suspension of the Expatriate Employment Levy. 

The letter, signed by Adewale-Smatt Oyerinde, Director General/Chief Executive of NECA, maintained that Nigeria is not conducive to policies such as the Expatriate Employment Levy, notwithstanding its good intention.

The Association maintained that the fundamentals of the EEL framework are that a tax can be levied only if a statute lawfully enacted so provides. 

It added: “In Nigeria, just as it is the case in most countries, there is a basic constitutional principle that any act of taxation must have a legal basis.

“This principle means that no tax can be levied except under authority of a law. 

“ This principle is found in section 59 of the 1999 Constitution of the Federal Republic of Nigeria and in a plethora of case laws such as the Ahmadu v. Governor of Kogi State [2002] 3 NWLR (Pt. 755), 502, at 522, (CA)”. 

According to the Association, there is no legal basis for the Expatriate Employment Levy, which raises fundamental questions of its legality. 

It added that: “The Expatriate Employment Levy is a duplication of policies already in existence and will create further encumbrance to the ease of doing business efforts of the Federal Government and create bottlenecks for intending foreign investors”. 

Reviewing the unintended economic consequences of the Expatriate Employment Levy, NECA said: “We are very worried about the rise in multiple levies in the country. 

“Expatriates who reside and work in Nigeria already pay as high as $1000-$2000 to process Combined Expatriate Residence Permit and Alien Card (CERPAC) and another $50-$200 for Administrative Fees. 

“In addition, we are concerned that at a time when Government should develop urgent mechanisms to prevent more companies from potential negative impact on the Niexiting the country, policies with a gerian economy surface almost on a weekly basis, further exacerbating the country’s economic woes. 

“A policy of this sort would, most definitely, create uneasiness within the business community and it could weaken the fiscal reforms of the President in terms of attracting Foreign Direct Investment (FDI) and Foreign Portfolio Investment (FPI). 

“This levy seeks to create another line of taxation and worsen the already bad financial situation of organizations in Nigeria, which the Presidential Fiscal Policy and Tax Reforms Committee headed by Mr. Taiwo Oyedele is making efforts to ameliorate by streamlining taxes and levies.

“It is manifestly evident that many businesses are struggling to stay afloat and many have already exited the country, fueling the challenge of unemployment. 

“Our expectation is that Government will do all that is necessary to provide incentives for investors to remain in Nigeria and to attract new Foreign Direct Investment, rather than create more financial burdens”. 

Comparing the Expatriate Employment Handbook to pre-existing legislation, NECA said: “Wherefore the essence of the Expatriate Employment Policy is expected to balance foreign expertise with local workforce development and to impose a levy on expatriates working in Nigeria, there are existing laws with the same objectives.For example, the Local Content Law provides for the protection of Nigeria’s labour markets and the promotion of skills transfer.

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