The Attorney-General of the Federation, AGF, Lateef Fagbemi, and Minister of Interior, Olubunmi Tunji-Ojo have been called before a Federal High Court in Abuja regarding the Expatriates Employment Levy (EEL).
The court summons states that both must appear in court on January 16 to defend the continued implementation of the planned expatriate taxation regime. This decision was made on Thursday by Justice Inyang Ekwo, the presiding court, following a motion ex parte filed by the plaintiff’s attorney, Patrick Peter.
BrandSpur Nigeria news today reports that within three days after the ruling, Ekwo ordered that the motion be given to the minister and the AGF. It was submitted by the Incorporated Trustees of the New Kosol Welfare Initiative and was designated FHC/ABJ/CD/1780/2024. To prevent the defendants from implementing the new taxation system for foreigners in Nigeria until the motion is heard and decided, the group requested an order of temporary injunction.
Raphael Ezeh, the group’s Programme Implementation Coordinator, stated in the document that is attached to the lawsuit that the federal government announced the EEL taxation policy on Tuesday, February 27, 2024.
Continuing, Ezeh said: “According to KPMG and other online information analysts and dissemination agencies, the federal government intends to compel all companies and organizations who engage the services of expatriates to pay EEL as follows: For every expatriate on the level of a director, fifteen thousand United States dollars ($15,000) equivalent to twenty-three million naira, by the current exchange rates, per annum.
“For every expatriate on a non-director level, ten thousand United States dollars ($10,000) equivalent to sixteen million naira, by the current exchange rates (N16,000,000) per annum,” he added.
Ezeh claims that in addition to these new rules, the federal government has also suggested penalties and sanctions for those who do not comply with the proposed taxing structure. According to him, failing to report information accurately could lead to a punishment of N1 million or five years in prison. He pointed out that a corporate organisation will be fined N3 million if they don’t submit the EEL within 30 days.
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A penalty of N3 million will also be imposed for submitting fraudulent information or failing to register an employee within 30 days, the Program Implementation Coordinator noted.
An organisation would be fined N3 million if they don’t renew their EEL before it expires, BrandSpur Nigeria news today reports.
He went on to say: “The proposed taxation regime is totally an anti-people policy because of its radical effect on different aspects of the Nigerian economy, and it works like a choke-hold against the economic growth of the nation.”
Ezeh pointed out that under the 1999 Constitution (as modified), taxes are a delicate matter that calls for cooperation between the legislative and executive branches of government. He emphasised that the executive branch by itself is not empowered to impose taxes on persons and corporate entities under Section 59 of the Constitution.
For the defendants to appear in court and provide justification, the case was postponed until January 16. To facilitate additional discussions with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and other interested parties, the Federal Ministry of Interior halted the EEL’s implementation in 2024.
