The Nigeria Employers’ Consultative Association (NECA) has said the Expatriate Employment Levy (EEL) policy, if implemented, would serve as a disincentive to Foreign Direct Investment (FDI).
NECA’s Director-General, Mr Wale Oyerinde, who made this known in a statement on Sunday, said that it would also frustrate the government on-going Fiscal and Monetary reforms, among other negative consequences.
He said also, that a reciprocal implementation of the same policy by other countries would have dire consequences on the careers and progress of Nigerians who were expatriates in other nations.
Recall that President Bola Tinubu recently inaugurated the EEL to close wage gaps between expatriates and the Nigerian labour force.
The EEL also mandates firms to pay levies for hiring expatriates and provides guidelines on the employment of Nigerians in foreign-owned companies.
Tinubu said, however, that the policy, which was initiated to oversee expatriate employment in the country, should not become a hindrance to foreign investment.
Oyerinde said: “While we absolutely support the government’s objective of developing the local workforce, we have, in fact, been at the forefront of promoting skills transfer, technical skills development and employment generation.
“However, the recently launched initiative of the Ministry of Interior has the potential to create more fundamental economic and socio-labour distortions.
“The imposition of US$15,000 and US$10,000 on organisations that employ expatriates at a time when businesses are shutting down and leaving the country in droves is worrisome.”
The director-general expressed concern over the legality and appropriateness of the levy, as well as, its effect on the economy.
He said that the provisions of a handbook could never over-ride clear provisions of extant laws in Nigeria, especially the 1999 Constitution of the Federal Republic of Nigeria, Immigration Act and the Local Content Act among others.
According to him, the Ministry of Interior and government cannot impose a tax or levy without appropriate legislation.
“For instance, Section 59 of the Nigerian Constitution requires that any imposition of tax, duty, fee or levy must be backed by an Act of the National Assembly.
“Levies that are imposed without complying with the provisions of section 59 of the Constitution offends the Constitution and are illegal, “ he said.
The NECA boss urged government to seek to strengthening existing regulatory institutions responsible for managing expatriate employment rather than imposing additional levies.
According to him, this will ensure a more responsive and accountable regulatory framework in the implementation of extant laws.
He said, it would also ensure the adoption of fiscal incentives to enhance investment attractiveness, support business stability, and prioritise measures that facilitate ease of doing business to attract both local and foreign investors.
“It will also ensure collaborative efforts between the government and private sector to explore alternative revenue streams and promote wealth creation through dialogue and stakeholder engagement.
“It is important for government to pursue strategies that foster a conducive investment climate without imposing undue burdens on businesses.
“Collaboration between the private sector and government is essential to finding equitable solutions that promote economic interests and support sustainable business growth, “ Oyerinde said.