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A Federal High Court has issued a three-day summons for Olubunmi Tunji-Ojo, the Minister of Interior, and Lateef Fagbemi, SAN, the Attorney-General of the Federation (AGF).

The summons relates to the proposed implementation of a controversial tax policy aimed at expatriates.

Justice Inyang Ekwo, ruling on an ex-parte motion filed by the plaintiff’s counsel, Patrick Peter, directed the Minister of Interior and the Attorney-General of the Federation to justify why the policy should not be halted. The court further ordered that the motion be served on both officials within three days.

The Incorporated Trustees of New Kosol Welfare Initiative filed a motion ex-parte, marked FHC/ABJ/CD/1780/2024, against the Minister of Interior and the Attorney-General of the Federation as the first and second defendants.

The application was submitted by a legal team led by Paul Atayi, seeking an interim injunction to restrain the defendants from implementing the Expatriate Employment Levy (EEL), a new taxation regime targeting expatriates in Nigeria, pending the determination of the motion on notice.

In an affidavit sworn by Raphael Ezeh, the group’s Programme Implementation Coordinator, it was disclosed that on February 27, 2024, the Federal Government announced the EEL policy.

According to reports cited by Ezeh from KPMG and other information sources, the policy mandates companies employing expatriates to pay annual levies, including $15,000 (equivalent to ₦23 million) for each expatriate at the director level and $10,000 (equivalent to ₦16 million) for each expatriate at non-director levels.

The affidavit further stated that the policy includes penalties for non-compliance, such as five years’ imprisonment and/or a fine of ₦1 million for inaccurate or incomplete reporting. Corporate entities failing to file the EEL or register expatriate employees within 30 days face fines of ₦3 million, while providing false information also attracts a fine of ₦3 million.

The plaintiff contends that the policy imposes undue burdens and has requested the court’s intervention to suspend its implementation.

The coordinator stated that any organization failing to renew the Expatriate Employment Levy (EEL) before its expiration would face a penalty of ₦3 million.

Ezeh described the proposed taxation regime as an anti-people policy, arguing that it would have a detrimental impact on various sectors of the Nigerian economy and act as a barrier to the nation’s economic growth.

He emphasized that taxation is a sensitive issue, requiring collaboration between the executive and legislative arms of government as stipulated in the 1999 Constitution (as amended). He referred to Section 59 of the constitution, which specifies that the executive arm alone cannot impose taxes on corporate entities or other citizens.

Ezeh further noted that the existing tax framework is far more favorable to expatriates compared to the proposed regime.

Ezeh alleged that the minister is about to commence full implementation of the EEL.

“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 said.

He said the plaintiff undertook to pay damages if the substantive suit turned out to be frivolous.

After listening to Peter, Justice Ekwo ordered the plaintiff to put the defendants on notice of the ex-parte application within 3 days of the order.

He said: “Upon being served, the defendants are hereby ordered to show cause why the prayers of the plaintiff ought not to be granted on the next date of hearing.”

The judge adjourned the matter until Jan. 16 for the minister and the AGF to show cause.

The Federal Ministry of Interior had earlier in 2024 postponed the implementation of the Expatriate Employment Levy (EEL), initially 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 key stakeholders.