The Nigeria Employers’ Consultative Association (NECA) has faulted the newly-released expatriate employment levy (EEL) handbook by the Federal Ministry of Interior, saying the levy imposed on employers keeping expatriates was not only exploitative and extortionist but also a disincentive to investments.
The handbook is purportedly aimed at enhancing skills transfer in Nigeria, however, but the employers’ body raised the alarm that the levies ranging from $10,000 to $15,000 imposed on employers that hire expatriates if implemented, would not only frustrate the federal government’s on-going fiscal and monetary reforms but would also serve as a disincentive to foreign direct investments (FDIs).
Speaking in Lagos, Director-General of NECA, Adewale-Smatt Oyerinde, said since the body supports the FG’s objective of developing the local workforce, it has always been at the forefront of promoting skills transfer, through technical skills development and employment generation.
Oyerinde is, however, worried that the new policy has the potential to create more fundamental economic and socio-labor distortions.
According to it, 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.
He stressed 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 countries.
He recalled the recent results of many businesses that have shown massive losses, a situation he said could potentially increase the level of unemployment with dire socio-economic consequences.
Oyerinde, who acknowledged government’s objectives emphasised the importance of pursuing strategies that could foster a conducive investment climate without imposing an undue burden on businesses.
According to him, collaboration between the private sector and government is essential to finding equitable solutions that promote economic interests and support sustainable business growth.
While raising organised businesses’ concern on the legality and appropriateness of the levy and its effect on the economy, Oyerinde said the provisions of the handbook could 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.
He said: “The Ministry of Interior and, indeed, the 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 Constitution and are illegal.”
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.
“Therefore, the introduction of additional levies is an unnecessary duplication and could impede the ease of doing business in Nigeria,” he said.
While proposing policy options and recommendations, the NECA boss urged that the government should seek to strengthen existing regulatory institutions responsible for managing expatriate employment rather than imposing additional levies,” he said.
The move, he said would ensure a more responsive and accountable regulatory framework in the implementation of extant laws; the adoption of fiscal incentives to enhance investment attractiveness, support business stability, and prioritise measures that facilitate ease of doing business to attract both local and foreign investors.
He added that collaborative efforts between the government and private sector to explore alternative revenue streams and promote wealth creation through dialogue and stakeholder engagement were pertinent.
