Dike Onwuamaeze
Following the additional levies of $10,000 and $15,000 on expatriate staff and directors, respectively, by the federal government, the Lagos Chamber of Commerce and Industry (LCCI) has expressed concern about likely perception by foreign investors that the Nigerian government is not accommodative of foreign workers.
LCCI warned that such perception would harm the country’s drive for Foreign Direct Investment (FDI), and said there was need for a balanced approach to expatriate employment.
Director General of LCCI, Dr. Chinyere Almona, made the assertions yesterday in a public statement, titled, “LCCI Perspective on Nigeria’s Expatriate Employment Levy (EEL).”
The statement read in part, “The point must be made that maintaining expatriates in Nigeria is expensive and as such our members only bring in expatriates for very critical roles that require highly technical skills that are not readily available locally.
“It is out of necessity that our members bring in expatriates and as such any imposition that makes this provision expensive will discourage them and jeopardise projects requiring such expatriates.”
Almona said while the chamber was “fully in support of government policies that enhance the profile of the business environment, generate more revenue for the government, and create more opportunities for local employment, we are concerned about likely perception by foreign investors that the Nigerian government is not accommodative to foreign workers. This perception is harmful to our drive for Foreign Direct Investments (FDIs) inflows”.
The statement also said with the drive for FDI, the country “needs conducive business environment to attract these kinds of investment into the country”.
It observed that only $184 million FDIs came to Nigeria in the fourth quarter of 2023 out of $1.088 billion capital importation that was recorded within the period.
The LCCI director-general called “on the government to consider exempting sectors that require unique skill sets for projects carried out in the country, especially in construction and other sectors where we have critical shortage of supply of goods to meet rising demand.
“In sectors where the country lacks capacity to boost supply of critical products, like food, cement, drugs, and other agricultural inputs, we urge the government to charge concessionary or totally exempt the manufacturers in these fields to encourage them to come in and boost supply of such scarce products.”
The chamber argued that the imposition of the latest sets of levies meant that expatriates would be subjected to two administrative procedures of procuring the Combined Expatriate Residence Permit and Alien Card (CERPAC) permit and the EEL.
Almona stated, “From experience, having two procedures will mean more human interfaces, more bureaucracy, and more application costs.
“We recommend that the government continue to work with the already established and functional CERPAC with provision for yearly or regular reviews in rates according to internationally accepted rates. This way, we present our economy as open for business.”
LCCI said, otherwise, “The EEL may cause unintended consequences that may trigger the relocation of foreign companies to neighbouring countries that present a more conducive and less expensive environment for business.”
LCCI further warned that the federal government was courting retaliatory policies from other countries that would imperil diaspora remittances from Nigerians in foreign lands, who would be the targets of such counter policies.
It said, “The imposition of this levy may likely spark retaliatory actions taken by other countries by imposing levies on foreigners and, particularly, targeting Nigerian workers. This will in turn affect diaspora remittances from Nigerian workers resident in other countries.”
The chamber said issues like the levies on foreign workers with tax implications would have been brought before the Presidential Committee on Fiscal Policy and Tax Reforms for inputs that aligned with their mandate of improving the business environment.
It stated, “There is also a need to align the provisions of this levy with existing frameworks, like the Nigerian Content Development and Monitoring Board (NCDMB), existing incentives granted to pharmaceutical companies by the National Agency for Food and Drug Administration (NAFDAC) and the Nigerian Civil Aviation Authority (NCAA).”
