By Johnson Momodu
In response to recent concerns raised by the Nigeria Employers’ Consultative Association (NECA) and allied bodies over the implementation of the Expatriate Employment Levy (EEL) it is important to state that the levy is aimed at fostering the development of the local workforce and ensuring equitable employment practices. One of the primary focuses of the government’s strategy that will commence after the temporary suspension to enable government address certain concerns, as understood, is the implementation of a robust ICT system for the collection of the levy, which aims to address several pressing issues within the labour market, including revenue generation, fiscal transparency, and the promotion of local employment opportunities.
It is significant to point out at this point that based on available pieces of information, the fear that the levy would be paid through some foreign consultants to the Federal Government is largely speculative. A robust ICT platform will be deployed by the Ministry of Interior, through which all the processes around the levy would be administered and/or managed. It has been confirmed that money derived from the policy implementation would go straight to the Central Bank of Nigeria (CBN) through REMITA platform and not to the account of some private companies. By automating levy collection processes, the government seeks to bolster revenue assurance and plug revenue leakages, in line with efforts to fortify the nation’s financial infrastructure.
Under the proposed EEL framework, expatriates will be charged fixed annual levies, with rates varying based on their positions within companies requiring their services. This approach is designed to discourage the influx of low-skilled expatriates. Employers are encouraged to prioritize local talent, thereby enhancing the competitiveness of Nigerian workers in the job market.
In addition to economic benefits, the EEL is expected to alleviate pressure on foreign exchange reserves by reducing the remittance of overseas salaries for expatriates. By promoting the use of local labour, the government aims to stimulate economic growth and reduce dependency on foreign workers. While acknowledging the contributions of expatriates, the government underscored the importance of creating opportunities for Nigerian workers and reducing reliance on foreign labour, by emphasizing the need to prioritize the interests of the local workforce.
The policy is not targeted at any particular race or community but rather aimed at benefiting the broader Nigerian population. Drawing parallels with recent changes to visa requirements in the United Kingdom, the government effort is in sync with global trend of countries implementing measures to protect domestic labour markets. As the government moves forward with the implementation of its labour reforms, it remains committed to fostering an environment conducive to economic growth and prosperity for all Nigerians. With a focus on skill development, job creation, and equitable employment practices, the government’s initiatives, as understood, aim to lay the foundation for a more inclusive and sustainable future.
Additionally, it is a bid to bolster revenue streams and empower the local workforce, and foster economic growth and transparency. The objectives of the EEL project are multifaceted, with a core focus on enhancing fiscal transparency, promoting ease of doing business, and creating employment opportunities for Nigerians. Key goals include boosting revenue from the non-oil sector, facilitating technology and knowledge transfer, and providing fair employment for low-paid jobs by expatriates.
One of the central aims is to address the issue of expatriates earning their main income abroad while receiving only allowances in Nigeria, thus evading proper taxation. By imposing fixed annual levies on expatriates, the EEL aims to rectify this imbalance, ensuring that the country benefits fully from the incomes earned within its borders. Moreover, the EEL is poised to curb the influx of low-skilled expatriate workers, opening up opportunities for skilled Nigerians and promoting upward mobility within the workforce.
Under the proposed system, levies will vary based on the expatriate’s position, with higher rates applicable to directorate-level roles. This nuanced approach reflects a commitment to fairness while incentivizing companies to prioritize local talent. The EEL project aligns seamlessly with the Renewed Hope Agenda, embodying a vision of economic revitalization and inclusive growth. By leveraging innovative strategies to enhance revenue generation and empower Nigerian workers, the government aims to propel the nation towards a future of prosperity and self-sufficiency. READ ALSO:
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It is a sweeping policy aimed at reshaping Nigeria’s economic landscape, with a keen focus on bolstering the nation’s security architecture, revenue generation, transparency component, and promotion of local employment opportunities. The policy underscores a commitment to drive sustainable growth and ensure a level play field for both expatriates and the Nigerian workforce. The ramifications of the policy are nested in the totality of the security architecture which is enhanced in the process of policy implementation by the data collected on expatriates by the Nigeria Immigration Service (NIS), the implementing agency. Through the data collected, it becomes easier for relevant government agencies to keep obligatory tabs on the activities of expatriate workers in Nigeria as well as enable the agencies to ferret out foreigners who are carrying out activities illegally in Nigeria, from Oyo, where gold is being illegally prospected in the Saki area through Zamfara, Niger, Nasarawa to Sambisa Forest contiguous to Borno State in particular, where similar illegal mining activities are being carried out by some foreign nationals.
Indeed, earlier outlined objectives of the policy include enhancing revenue generation from the non-oil sector, ensuring fiscal transparency, and facilitating ease of doing business within the country. Additionally, measures are in place to stimulate technology and knowledge transfer, ultimately leading to increased employment income and upskilling opportunities for Nigerian workers. A key aspect of the policy is the provision of fair employment for low-paid jobs, aiming to bridge the gap between expatriate and local workers. By imposing fixed annual levies on expatriates, the government seeks to reduce foreign exchange pressure and incentivize companies to prioritize local talent, thus contributing to higher profitability and corporate tax revenues. Moreover, the policy aims to monitor expatriate movement and skill sets influx, driving competitiveness and lowering costs for companies while attracting further foreign direct investments (FDI).
■ Johnson Momodu is a public affairs analyst based in Abuja.
