The Expatriate Employment Levy handbook was recently issued by the Ministry of Interior and was launched by the Nigerian president, on 27 February 2024. The Expatriate Employment Levy is a government-mandated contribution imposed on companies that employ expatriate workers in Nigeria. According to the Nigerian government, the Levy is aimed at addressing the wage imbalance between the expatriate employees and local employees, whilst also protecting the local job market.
An annual sum of $15,000.00 (Fifteen Thousand USD) is payable for each director and an annual sum of $10,000 (Ten Thousand USD) is payable for other categories of expatriates. This payment applies to any expatriate that is employed for 183 days or more.
There appears to be no distinction on the size of the company and any company which employs expatriates (defined as non-Nigerians citizens) within Nigeria are liable to pay the EEL. This includes multinational companies, small and medium size enterprises (SMEs).
The EEL applies to private sector companies utilizing foreign workforce or relying on expatriate labour. These companies include but not limited to construction, agriculture, oil and gas, telecommunication, maritime and shipping, etc. It should be noted that the coverage of the EEL is in no way limited to the aforementioned industries as the coverage covers all industries engaging expatriate talent.
To be liable to pay the EEL, an expatriate worker must have been employed for a period not less than 183 days within a year. The 183 days may be calculated and spread across a period exceeding one fiscal year.
An employer would still be liable to pay the EEL in a situation where the expatriate is temporarily seconded or assigned to work in a foreign country provided the concerned expatriate occupies a Quota Position in a company operating in Nigeria.
The EEL does not apply to all accredited staff of diplomatic missions and government officials.
The NIS is responsible for determining the expatriates which fall within the purview of EEL. It is also responsible for enforcing the EEL in line with the provisions of the Nigerian Immigration Act, 2015 and the applicable Nigerian Visa Policies.
The Government is required to provide online platforms for employers of expatriates in Nigeria to report employment details of expatriates electronically.
Both the employers and expatriate employees have reporting and compliance obligations. Employers are required to maintain comprehensive records which include salary details, work permits, etc. on expatriate employees. The employers are also mandated to provide timely reports to government and notify any change in expatriate employment circumstances to the appropriate government agencies. There is also a need for employers to comply with filing deadlines.
The expatriate employee has the responsibility to ensure that accurate personal information and employment details are reported to employers and government.
The government agencies responsible for EEL enforcement may conduct compliance audits for accuracy of information provided to it and may also crosscheck the information provided with data from other sources such as immigration records and tax filings.
Sanctions and penalties have been provided for various infractions relating to the EEL as follows:
The EEL has been introduced to regulate and balance the benefits of expatriate employment with the protection of Nigeria’s local labour markets. The EEL is payable by any company employing expatriate employees in Nigeria. The EEL is enforced by the NIS and there are reporting and compliance obligations imposed on employers and expatriate employees. Sanctions and penalties also apply where there is a failure to comply with obligations imposed by the EEL handbook.
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