Justice Inyang Ekwo of the Federal High Court in Abuja has directed the Minister of Interior, Olubunmi Tunji-Ojo, and the Attorney-General of the Federation (AGF), Lateef Fagbemi, to explain why the proposed expatriates taxation regime should not be halted.
The ruling came in response to an ex-parte motion filed by the plaintiff, Patrick Peter, who seeks an injunction to stop the implementation of the new Expatriate Employment Levy (EEL).
In his ruling, Justice Ekwo instructed that the minister and the AGF be served with the motion within three days.
The plaintiff’s application seeks to prevent the government from enforcing the EEL, which would require companies employing foreign expatriates to pay an annual tax of $15,000 for directors and $10,000 for non-directors, amounts equivalent to N23 million and N16 million respectively.
The plaintiff’s affidavit contends that the proposed levy, along with severe penalties for non-compliance, including imprisonment and financial penalties, could severely harm Nigeria’s economic growth.
The plaintiff argues that the levy could stifle foreign investment and worsen the country’s economic challenges.
Ezeh, the Programme Implementation Coordinator, expressed concerns that the government’s unilateral action on the EEL without legislative collaboration contravenes constitutional tax provisions, particularly Section 59, which requires joint action by the executive and legislature to impose new taxes.
In response, Justice Ekwo adjourned the matter to January 16, 2025, and directed the defendants to justify their position on the matter.
The court has set a hearing for both parties to present their arguments regarding the implementation of the levy.
The Ministry of Interior had previously suspended the implementation of the levy earlier in 2024, citing the need for further consultations with stakeholders, including NACCIMA.
