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    GMS Flash Alert 2024-058

    Nigeria – Federal Government Nixes Implementation of Expatriate Employment Levy for Now

    GMS Flash Alert 2024-058 | March 14, 2024

    Days after Nigeria’s federal government announced the rollout of the Expatriate Employment Levy (EEL), the Federal Ministry of the Interior suspended its implementation.1

    A government press release on the announcement of the suspension of the implementation of the EEL comes with a pledge to hold "...further dialogue and consensus-building among stakeholders."

    WHY THIS MATTERS


    This suspension of implementation of the EEL and the intention of the federal government to further consult with those stakeholders that would be affected by the EEL should be a relief for multinationals intending to bring foreign national workers to Nigeria and for the workers themselves.

    Had the EEL been implemented, this would have meant more administrative steps for international assignment programme managers and/or immigration counsel in charge of Nigeria-inbound expatriate employees.  Moreover, given the costs associated with the EEL, expenses tied to Nigeria-inbound expatrate employees would have gone up. 

    Background

    On 27 February 2024, Nigerian President Bola Ahmed Tinubu, GCFR, launched the Expatriate Employment Levy (EEL).2  The EEL was to be a government-mandated contribution imposed on organisations which engage expatriate workers in Nigeria, subject to certain exemptions, with effect from 15 March 2024, and employers had until 15 April 2024 to comply.  According to the government, the EEL was intended to promote skills transfer and knowledge sharing, balance economic growth and social welfare, enhance collaboration between public and private sectors, and address demographic shifts.  The EEL was to serve as a mandatory document like a passport.  

    The levy was expected to be computed at $15,000 (U.S. dollars) for every expatriate on director level and $10,000 for those at other levels.  

    Several countries, especially in the Middle East, have implemented expatriate levies or similar measures to grow their revenue base or control the influx of expatriates.   

    KPMG INSIGHTS


    The decision to suspend the implementation of the EEL is a welcome development.  It demonstrates the willingness of the government to take on board the concerns of businesses and organisations in respect of the EEL policy, especially in light of claims by many that implementation of the EEL could negatively impact businesses and their employees.

    Employers of expatriate employees with questions and concerns should reach out to their global-mobility service provider and/or immigration counsel, or a member of the Global Mobility Services team with KPMG in Nigeria (see the Contacts section).

    For more analysis and commentary, see the following publications of the KPMG International member firm in Nigeria:

    “Federal Government Suspends the Implementation of the Expatriate Employment Levy” in Tax Alert (Issue no. 3.2, March 2024)

    “Federal Government Launches the Expatriate Employment Levy” in Tax Alert (Issue No. 3.1, March 2024).

    Contacts

    ajibola-olomola
    Ajibola Olomola

    Partner & Head, Global Mobility Services

    KPMG Accountants B.V

    adenike-yomi-faseun
    Adenike Yomi-Faseun

    Partner & Head, Managed Services Group

    KPMG in Nigeria

    bukunmi-olaniyonu
    Bukunmi Olaniyonu

    Senior Manager, Tax, Managed Services Group

    KPMG in Nigeria

    Additional Resources

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    Footnotes

    1   See Ministry of Interior press release "FG Addresses Stakeholders' Concerns on Expatriate Employment Levy" at: https://interior.gov.ng/press-release/fg-addresses-stakeholders-concerns-on-expatriate-employment-levy/ .

    2  See Ministry of Interior, Public Notice at: https://interior.gov.ng/press-release/public-notice-expatriate-employment-eel-eelinteriorgovng/ .

    See Ministry of Interior, "FG Rolls Out Expatriate Employment Levy Guidelines" at: https://interior.gov.ng/press-release/fg-rolls-out-expatriate-employment-levy-guidelines/ .

    Disclaimer

    * Please note the KPMG International member firm in the United States does not provide immigration or labour law services. However, KPMG Law LLP in Canada can assist clients with U.S. immigration matters.

    The information contained in this newsletter was submitted by the KPMG International member firm in Canada.

    GMS Flash Alert is a Global Mobility Services publication of the KPMG LLP Washington National Tax practice. The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

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