The Nigeria Employers’ Consultative Association (NECA) has issued a stern warning regarding the potential ramifications of the Ministry of Interior’s proposed expatriate employment levy. NECA expressed concerns that the levy could act as a deterrent to investment in the country.
The association criticized the levy, highlighting the necessity for specific regulations to precede its implementation. NECA emphasized that the imposition of such a tax could hinder the Federal Government’s ongoing fiscal and monetary reforms.
NECA’s Director-General, Adewale-Smatt Oyerinde, raised significant objections to the levy, labeling it as exploitative and contradictory, particularly during a period when Nigeria actively seeks Foreign Direct Investment (FDI). Oyerinde stressed that the levy, ranging between $10,000 to $15,000 on employers hiring expatriates, could yield unintended negative consequences, including disincentivizing FDI.
While NECA supports the government’s objective of enhancing local workforce development and skills transfer, Oyerinde cautioned that the Ministry of Interior’s initiative might lead to economic and socio-labor distortions.
NECA expressed legal concerns over the levy’s legitimacy, emphasizing that any tax or levy must be backed by appropriate legislation, as stipulated by the Nigerian Constitution.
Oyerinde argued that existing legislation, such as the Local Content Act and Immigration Act, already addresses objectives similar to those outlined in the Expatriate Employment Handbook, rendering additional levies unnecessary and potentially harmful to the ease of doing business in Nigeria.
Furthermore, NECA highlighted the potential adverse effects of reciprocal implementation of similar policies by other countries, affecting the careers and progress of Nigerian expatriates abroad.
In response, NECA urged the government to strengthen existing regulatory institutions responsible for managing expatriate employment, rather than imposing additional levies. Oyerinde emphasized the importance of fiscal incentives to enhance investment attractiveness and support business stability.
NECA called for collaborative efforts between the government and the private sector to explore alternative revenue streams and promote wealth creation, stressing the need for dialogue and stakeholder engagement to ensure fair solutions that facilitate economic interests and sustainable business growth.
