The Attorney-General of the Federation (AGF), Lateef Fagbemi, SAN, is locked in a legal battle with the Incorporated Trustees of New Kosol Welfare Initiative over the government’s plan to tax expatriates working in Nigeria. This policy, known as the Expatriate Employment Levy (EEL), is causing quite a stir. Is it a game-changer for the Nigerian economy, or a burden that will scare away foreign talent? Let’s dive in!
Here’s a quick rundown of what’s happening:
- The Issue: The New Kosol Welfare Initiative is challenging the legality of the proposed Expatriate Employment Levy (EEL).
- AGF’s Stance: The AGF argues that the group lacks the legal right (locus standi) to bring the case to court and that there’s no valid reason for the lawsuit.
- The Group’s Argument: The group insists they have the right to sue, citing public interest, and that the court has the jurisdiction to hear the case.
- What’s at Stake: The EEL could significantly impact companies employing foreign workers in Nigeria.
What’s This Expatriate Employment Levy (EEL) All About?
So, what exactly is this EEL that’s causing so much drama? Basically, the Federal Government wants companies that hire foreign workers to pay a tax. Here’s the breakdown:
- Directors: $15,000 USD per year (about ₦23,000,000 at current exchange rates).
- Non-Directors: $10,000 USD per year (around ₦16,000,000).
The government believes this levy will:
- Boost government revenue.
- Encourage companies to hire more Nigerians.
- Ensure that expatriates contribute to the Nigerian economy.
Why the Fuss? Concerns About the New Tax
Not everyone is thrilled about the EEL. Critics argue that it could:
- Increase the cost of doing business in Nigeria.
- Discourage foreign investment.
- Make it harder for companies to attract top talent from overseas.
Raphael Ezeh, the Programme Implementation Coordinator for the New Kosol Welfare Initiative, calls the EEL an “anti-people policy” that could stifle economic growth.
The Legal Battle: Who Has the Right to Sue?
The AGF is arguing that the New Kosol Welfare Initiative doesn’t have the legal standing (locus standi) to bring this case to court. In simpler terms, they’re saying it’s none of their business.
However, the group’s lawyer, Paul Atayi, argues that they have every right to sue because the issue is in the public interest. He cites Section 25 (r) of the Constitution, which gives the Federal High Court jurisdiction over cases affecting the actions of the Federal Government.
What Happens Next?
The case is ongoing. Justice Ekwo of the Federal High Court in Abuja has adjourned the hearing until March 24th. It remains to be seen whether the court will side with the AGF or the New Kosol Welfare Initiative.
Potential Impact on Nigeria
The outcome of this case could have a significant impact on Nigeria’s economy and its relationship with foreign workers. If the EEL is implemented, companies may have to rethink their hiring strategies. On the other hand, if the court strikes down the levy, it could send a message that the government needs to consult more widely before introducing major economic policies.
Other Possible Consequences
- Companies might prefer to hire local talents, as this could lead to more job opportunities for Nigerians.
- Some companies might relocate to other countries with more favorable tax policies.
- The cost of goods and services could increase as companies pass the tax burden onto consumers.
For example, look at the tech industry in Nigeria. Many startups rely on foreign expertise in the early stages. A tax like this might force them to look inward, which could be a good thing in the long run, but could also slow down innovation in the short term.
About The Author
