From Godwin Tsa, Abuja
Hearing in a suit seeking to stop the federal government from implementing the proposed expatriates’ taxation regime on Thursday suffered a setback at the Abuja division of the Federal High Court.
The plaintiff, Incorporated Trustees of New Kosol Welfare Initiative, had, in the motion ex-parte marked: FHC/ABJ/CD/1780/2024, sued the Interior Minister and Attorney General of the Federation (AGF) as 1st and 2nd defendants.
However, Justice Inyang Ekwo, who had adjourned the case to Thursday, January 16, after declining to grant an interim injunction as sought by the plaintiff, did not sit.
After declining the injunctive relief, Justice Ekwo ordered the Minister of Interior, Dr Olubunmi Tunji-Ojo, and the Attorney General of the Federation (AGF), Mr Lateef Fagbemi, SAN, who are defendants, to show cause why the prayers sought by the plaintiff should not be granted.
The judge, in a ruling on a motion ex-parte moved by counsel for the plaintiff, Patrick Peter, ordered that the minister and the AGF be served with the motion within three days of the order. He then adjourned the matter until January 16 for the defendants to show cause.
The plaintiff, in its application led by legal team head Paul Atayi, sought an order of interim injunction restraining the defendants from commencing the implementation of the new Expatriates’ Taxation Regime, known as the ‘Expatriate Employment Levy (EEL),’ in Nigeria, pending the hearing and determination of the motion on notice.
A programme implementation coordinator of the group, Raphael Ezeh, in the affidavit he deposed, averred that on February 27, 2024, the federal government unveiled a set of proposed new taxation policies called the Expatriate Employment Levy (EEL).
“According to KPMG and other online information analysts, the federal government intends to compel all companies and organisations engaging the services of foreign expatriates to pay tax under EEL as follows:
For every expatriate at the level of a director: $15,000.00 (N23,000,000.00 per annum).
For every expatriate at a non-director level: $10,000.00 (N16,000,000.00 per annum),” he said.
Ezeh averred that the federal government also planned additional regulations consisting of penalties and sanctions for non-compliance with the proposed taxation regime.
He detailed the proposed penalties, including imprisonment for inaccurate or incomplete reporting and fines for corporate entities failing to file or renew EEL within specified periods.
Ezeh argued that the proposed taxation regime is an anti-people policy with radical effects on different aspects of the Nigerian economy, acting as a choke-hold against economic growth. He highlighted the constitutional requirement for collaboration between the executive and legislative arms in tax matters, asserting that the executive alone lacks the power to impose taxes.
The Federal Ministry of Interior had, in 2024, suspended the implementation of the EEL, launched on February 27, 2024, to allow for further consultations with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and other stakeholders.