The beleaguered Federal Government of Nigeria, under the leadership of President Bola Ahmed Tinubu, has, like a trapeze artist, been balancing on a tight rope and delicately juggling scores of brittle glass balls wherein lie the livelihoods and sensibilities of millions of countrymen and women, many of them on edge and vexed.
To make matters worse, these are testy times. The country’s economy is in a shambles. The cost of living keeps spiralling upwards to the discomfort of the poor and the otherwise considered rich.
The Presidency is challenged to turnaround a battered economy to a state where it can reflect its best potential and deliver wellness, prosperity and peace to teeming stakeholders.
In this state of affairs, it is understandable that the leadership would be pointedly looking to generate revenue at almost every turn.
But this quest can be taken too far.
And so, the Federal Government in the month of February came up with the Expatriate Employment Levy (EEL), ostensibly in a bid to drive economic growth and foster local workforce development.
The new Expatriate Employment Levy was computed at $15,000 for every expatriate on director level and $10,000 for those on other levels working in Nigeria.
The Levy primarily targeted employers who engaged expatriate workers within Nigeria. The EEL was said to aim to promote skill transfer and knowledge sharing, foster economic growth and social welfare, and enhance collaboration between the public and private sectors.
By imposing a levy on employers, the EEL ordinarily appeared to seek to discourage foreign-owned companies from engaging expatriates in positions where Nigerians are eminently qualified and advance Nigeria’s economic growth objectives.
Informed industry watchers tended to be of the consensus, however, that the move was aimed more at revenue generation with a view to shoring up the economy in these lean times.
They further observed that it would eventually prove to be a double-edged sword, which would do more harm than good to the country, as it would elicit reciprocal responses from nations around the world that play host to diaspora Nigerians. Unofficial reports state that there are about 15 million Nigerians living in the diaspora.
Nigerians living and working in the diaspora, they said, would be so strangulated by similar taxations that they would become impoverished and unable to sustain the level of remittances they typically sent back to the home country for investment and the welfare of mostly indigent loved ones.
Recall that Nigeria’s annual diaspora remittances have recently peaked to about $20 billion, making the country the largest diaspora remittances recipient in sub-Saharan Africa.
The Federal Government’s new EEL was met with widespread disapproval, especially by business groups.
Protesting the decision, Gabriel Idahosa, President and Chairman of Council of the Lagos Chamber of Commerce and Industry (LCCI), said it had caused some investors to speedily put various projects in the pipeline on hold.
In an interview with Arise News last Thursday, Idahosa said the expatriate levy was not what was required for foreigners to operate in Nigeria as government already charged $2,000 for issuing the annual green card. The new charge, he said, amounted to a levy on foreigners for living in Nigeria, which was out of place, unusual and would likely meet with costly pushback from recipient nations.
Idahosa said, “None of those investors know or expect that when they come to invest hundreds of millions of dollars in Nigeria to build a gas processing plant, and they need to bring, let’s say five, ten, twenty employees, none of them have been told that those employees, they’re going to be paying $10,000. And these are very important factors in decision making.”
It is in our national interest to review the levy, as the levy could further drive away investment, as he said, explaining, “When they (investors) invest, they expect to protect their investment by having some of their top people here as directors, as technical people to manage that investment. These people are part of the cost of that project, and if you want to make the investment attractive, you have to ensure that the cost of bringing those expatriates is affordable all the time.”
Thankfully, government has suspended the policy and said a joint committee will be formed to review the EEL policy and make resolutions where necessary.
In a press statement released on Friday, it was revealed that the decision came after a meeting was held on Friday with the Honourable Minister of Industry, Trade, and Investment, and the Honourable Minister of Interior.
While various industry groups who engaged with the Federal Government to bring about the suspension in the national interest are worthy of praise, the Federal Government itself would be advised to consult widely and wisely before taking such telling decisions.
