President Bola Tinubu has launched the Expatriate Employment Levy (EEL), a government-mandated contribution imposed on organisations which engage expatriate workers in Nigeria, subject to certain exemptions.
The levy will be computed at $15,000 for every expatriate on the director level and $10,000 for those on other levels.
The EEL, which is payable annually will serve as a mandatory document like a passport. Every eligible expatriate will be required to present the EEL card at the time of exit and entry into Nigeria.
Paragraph 8.11 of the handbook which contains the implementation guidelines and was launched alongside the EEL by Tinubu last week specifies that the levy would be based ‘mostly on the offshore earnings of expatriates working in Nigeria’. This suggests an ad valorem rate, which is different from the fixed amounts specified in the handbook. It should qualify for tax deduction as a validly incurred business expense.
The effective date of implementation of the EEL has been defined as March 15, 2024, and employers have until April 15, 2024, to comply.
Its objectives, according to the government, are to promote skills transfer and knowledge sharing, balance economic growth and social welfare, enhance collaboration between public and private sectors and address demographic shifts.
Several countries, especially in the Middle East, have implemented expatriate levies or similar measures to grow their revenue base or control the influx of expatriates. So, Nigeria is not alone in this regard.
According to the handbook, the project will be operated on a Public Private Partnership (PPP) model between the Federal Government of Nigeria represented by the Federal Ministry of Interior as the guarantor while the Nigeria Immigration Service (NIS) will serve as the implementing agency.
In this regard, the NIS will carry out periodic audits to ascertain the level of compliance with the EEL. However, the handbook does not specify how any disputes arising from the audit may be resolved.
According to the handbook, employers are required to register their expatriate employees through an online reporting portal that will be set up for this purpose.
Expatriates who are on quota or are in Nigeria for at least 183 days in any 12 months will be liable to pay the EEL. However, accredited staff of diplomatic missions and government officials are exempt from the levy.
