A Federal High Court in Abuja has ordered Minister of Interior, Olubunmi Tunji-Ojo, and Attorney-General of the Federation (AGF), Lateef Fagbemi to appear before it in three days.
Gatekeepers News reports that the court summoned the minister and AGF so that they can explain why implementation of the proposed expatriates taxation regime should not be stopped.
The presiding judge, Justice Inyang Ekwo, in a ruling on a motion ex-parte, moved by the plaintiff’s counsel, Patrick Peter, ordered that they be served with the motion within three days of the order.
The plaintiff, which is the Incorporated Trustees of New Kosol Welfare Initiative, had in the motion ex-parte marked: FHC/ABJ/CD/1780/2024, sued Tunji-OjoFagbemi1st2nd defendants.
The group sought an order of interim injunction restraining the defendants from beginning implementation of the new Expatriates’ Taxation Regime in the country, pending the hearing and determination of the motion on notice.
Programme Implementation Coordinator of the group, Raphael Ezeh, in the affidavit he attached to the suit, said that on Tuesday, Feb. 27, 2024, the federal government unveiled a set of proposed new taxation policies called the Expatriate Employment Levy (EEL).
He said, “According to KPMG and other online information analysts and dissemination agencies, the Federal Government intends to compel all companies and organisations who engage the services of foreign expatriates to pay tax E.E.L as follows:”
“For every expatriate on the level of a director — Fifteen Thousand United States Dollars ($15,000.00) equivalent to Twenty-Three Million Naira, by the current exchange rates (NW23,000,000.00) per annum”
“For every expatriate on a non-director level – Ten Thousand United States Dollars ($10,000.00) equivalent to Sixteen Million Naira, by the current exchange rates (N16,000,000.00) per annum”
Ezeh also said that the federal government planned additional regulations consisting of penalties and sanctions for non-compliance with the proposed taxation regime.
The coordinator said that inaccurate or incomplete reporting will attract five years of imprisonment and/or N1 million.
He said failure of a corporate entity to file EEL within 30 days is to attract a penalty of N3 million, failure to register an employee within 30 days will also attract N3 million, while submission of false information will attract N3 million.
The coordinator said failure to renew EEL before its expiry date by an organisation is to attract a sanction of N3 million.
Ezeh said, “The proposed taxation regime is totally an anti-people policy because of its radical effect on different aspects of the Nigerian economy, and it works like a choke-hold against the economic growth of the nation.”
He said taxation is a sensitive matter which, under 1999 Constitution (as amended), calls for collaboration of the executive and legislative arms of government.
The coordinator said under Section 59 of the constitution, the executive arm of government alone doesn’t have the power to impose tax on corporate bodies and other citizens of the nation.
He said the current prevailing tax regime is far more friendly towards expatriates than the proposed one, adding that the minister is about to commence full implementation of the EEL.
Ezeh said, “If the defendants are not restrained by an order of this honourable court, they will commence full implementation of the said programme and thereby threatening the nation’s economic sustainability.”
He further said the plaintiff undertook to pay damages if the substantive suit turned out to be frivolous.
Justice Ekwo then ordered the plaintiff to put the defendants on notice of the ex-parte application within 3 days of the order.
The judge adjourned the matter until Jan. 16 for the minister and the AGF to show cause.
Federal Ministry of Interior had, earlier in 2024, suspended implementation of the EEL, which was launched on Feb. 27, 2024. It was done to allow for further consultations with Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and other vital stakeholders.
