FG Opposes Suit Challenging Proposed Expatriate Tax Policy
The Attorney-General of the Federation, Lateef Fagbemi (SAN), and the Minister of Interior, Olubunmi Tunji-Ojo, have asked the Federal High Court in Abuja to dismiss a lawsuit challenging the proposed expatriate taxation policy in Nigeria.
The ministers made this request in their preliminary objections, filed separately before the presiding judge, Justice Inyang Ekwo.
The plaintiff, the Incorporated Trustees of New Kosol Welfare Initiative, filed the suit in an ex-parte motion marked FHC/ABJ/CS/1780/2024.
The motion was filed through a legal team led by Paul Atayi, suing the Minister of Interior and the Attorney-General of the Federation as the 1st and 2nd defendants, respectively.
The group seeks an order of interim injunction restraining the defendants from implementing the new expatriate taxation policy, the “Expatriate Employment Levy,” pending the hearing and determination of the motion on notice.
In its affidavit, deposed by Programme Implementation Coordinator, Raphael Ezeh, the plaintiff asserts that the Federal Government introduced the proposed taxation policy on February 27, 2024.
Ezeh argued that the policy is detrimental to Nigeria’s economy, likening it to a chokehold against the nation’s growth.
According to KPMG and other analysts, the proposed policy mandates that companies employing foreign expatriates pay the following Expatriate Employment Levy:
“For expatriates at the director level: $15,000, equivalent to N23,000,000 per annum at current exchange rates. For expatriates at non-director levels: $10,000, equivalent to N16,000,000 per annum.”
Ezeh further highlighted additional regulations, including severe penalties for non-compliance, such as: “A penalty of up to five years in prison and/or ₦1m for inaccurate or incomplete reporting. N3m fines for failure to file the EEL within 30 days or for non-registration of an employee. A N3m penalty for failure to renew the EEL before its expiry.”
At the resumed hearing on Monday, plaintiff’s counsel, Atayi, informed the court that the matter was scheduled for hearing the Attorney-General’s preliminary objection.
He added that the Minister of Interior, despite being served, had not been represented. Atayi also confirmed he had responded to the Attorney-General’s preliminary objection.
Justice Ekwo informed Atayi that the Minister of Interior had filed a preliminary objection on March 14, which Atayi claimed not to have received.
Justice Ekwo instructed Atayi to apply for a copy of the objection from the court registry and respond accordingly to expedite the matter.
The suit was adjourned to May 7 for hearing of the preliminary objections.
In her preliminary objection filed on March 14, Mrs. Eva Omotese, Director of Legal Services for the Ministry of Interior, requested the court to strike out the Minister’s name from the suit.
She resented five grounds for the objection, arguing that the plaintiff had failed to establish its locus standi to file the suit, which she claimed deprived the court of jurisdiction to hear the matter.
Omotese described the suit as “academic or hypothetical,” asserting that there was no valid cause of action against the Minister.
She further argued that the Expatriate Employment Levy is a financial charge imposed by the Federal Government on companies employing foreign workers, designed to regulate expatriate employment, foster local talent development, and generate revenue for national development.
Omotese noted that the EEL was approved by the Federal Executive Council in 2023 and, in February 2024, President Bola Tinubu launched a handbook for its implementation.
After consultations with stakeholders, the President had ordered a suspension of the policy’s implementation, emphasising that the policy had not been launched and that the Federal Government had not announced plans for its implementation.
Omotese contended that the plaintiff had no evidence to prove that either the Minister or the Nigerian Immigration Service was preparing to implement the EEL.
She argued that the plaintiff’s decision to file the suit without seeking clarification from the Minister rendered the case premature and amounted to an abuse of court process.
The minister’s representative prayed the court to dismiss the plaintiff’s motion and award substantial costs in favor of the defendants.
Similarly, the Attorney-General filed a preliminary objection, arguing that the plaintiff lacked locus standi and failed to disclose a cause of action.
The Attorney-General’s objection, filed by the Director of Civil Litigation and Public Law, Maimuna Shiru, sought an order to dismiss the suit for lack of jurisdiction.
In response, the plaintiff maintained that the court had jurisdiction to hear the matter, asserting that the case was a public interest litigation, which gave the plaintiff the legal standing to file it.
The plaintiff urged the court to dismiss the ministers’ objections.
