Employers Reject FG’s Expatriate Employment Levy: A Threat to Nigeria’s Investment Climate?

Tthe Nigeria Employers’ Consultative Association (NECA) has strongly opposed the Ministry of Interior’s Expatriate Employment Levy, claiming it will deter investment in the country.

The association also questioned the legality and appropriateness of the levy, citing existing laws and regulations that cover the same objectives.

The NECA’s Director-General, Adewale-Smatt Oyerinde, stated that the levy of $10,000 to $15,000 on employers hiring expatriates contradicts the Federal Government’s ongoing fiscal and monetary reforms.

He further argued that imposing such a levy at a time when businesses are shutting down and leaving the country in droves is counterproductive and could lead to increased unemployment and socio-economic consequences.

The NECA chief also pointed out that the levy contradicts the Nigerian Constitution, which requires any imposition of tax, duty, fee, or levy to be backed by an Act of the National Assembly.

He emphasized that existing laws, such as the Local Content Act and Immigration Act, have already addressed objectives like those of the Expatriate Employment Levy Handbook, making the introduction of additional levies unnecessary and potentially harmful.

Oyerinde highlighted that the levy, if implemented, 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 urged the government to strengthen existing regulatory institutions responsible for managing expatriate employment rather than imposing additional levies.

The NECA suggested adopting fiscal incentives to enhance investment attractiveness, support business stability, and prioritize measures that facilitate ease of doing business to attract both local and foreign investors.

The association also called for collaborative efforts between the government and private sector to explore alternative revenue streams and promote wealth creation through dialogue and stakeholder engagement.

As the debate around the Expatriate Employment Levy continues, it remains to be seen how the Federal Government will respond to the concerns of the NECA and other stakeholders in the business community.