Nigeria | Initiative imposes levy on companies hiring foreign workers

The Nigerian government recently launched guidelines for the Expatriate Employment Levy initiative that applies to employers hiring foreign workers.

• The EEL project was approved by the Federal Executive Council in May 2023 with a mandate that employers pay a levy for hiring foreign workers.
• Employers are defined by the guidelines as “businesses of varying sizes operating in Nigeria, including multinational corporations, small and medium-sized enterprises (SMEs), and other entities engaging expatriate talents.”
• The levy does not apply to accredited staff of diplomatic missions and government officials.
• The levy, to be paid annually, has been currently set at NGN 23,415,150 (about US$15,000) for directors and NGN 15,610,100 (about US$10,000) for other workers. Due to exchange rate volatility in Nigeria, the Naira equivalent is not fixed and is subject to changes. The implementation policy allows for the applicable fee in Naira to be determined daily. The payment portal can be found here.
• Penalties for noncompliance can subject employers to fines of NGN 3 million (about US$1,921).

Additional Information: The EEL initiative aligns with Nigeria’s Renewed Hope Agenda unveiled in 2023 as a strategy to build a trillion-dollar economy within the next decade. Minister of Interior Dr. Tunji-Ojo said, “This initiative underscores our commitment to creating employment opportunities, enhancing revenue generation and fostering economic growth through public-private partnerships.” Summary of the EEL guidelines can be found here.

BAL Analysis: The Nigerian government’s guidelines explicitly state that the levy was created in part to address demographic shifts, which include more than 150,000 expatriates now living in Nigeria and whose employment has resulted in wage gaps and disparities in core competencies that the government is endeavoring to reduce.

This alert has been provided by the BAL Global Practice Group.

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