FG Sets Annual Employment Levy for Companies Hiring Foreign Workers, Expert Explains Consequences

FG Sets Annual Employment Levy for Companies Hiring Foreign Workers, Expert Explains Consequences

  • The Nigerian government has introduced a mandatory annual levy for organisations employing expatriate workers
  • The levy is intended to encourage foreign companies to hire more Nigerian workers and balance employment opportunities between Nigerians and expatriates
  • Companies will pay $10,000 for staff and $15,000 for directors, which translates to N15 million and N22.5 million respectively

Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.

The federal government has introduced a new policy requiring expatriate workers employed by companies to pay an annual levy.

Speaking at the launching of the expatriate handbook, President Bola Tinubu revealed foreign workers will pay $15,000 (£12,000) for a director and $10,000 for other employees.

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Foreign workers to pay levy to Nigerian government
Nigerian govt plans to charge companies for hiring foreign workers Photo credit: Presidency
Source: Getty Images

The levy applies to employees who work for at least 183 days a year.

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The only foreign workers exempted from the fee are staff of diplomatic missions, and government officials are exempt, Punch reports.

Why did FG introduce an expatriate levy?

According to Tinubu, introducing an expatriate levy aims to balance employment opportunities between Nigerians and expatriates.

He added that the government was expecting to improve revenue and indigenisation.

The president also warned that the levy should not be used to frustrate potential investors.

His words:

"The goal is to close wage gaps between expatriates and the Nigerian labour force while increasing employment opportunities for qualified Nigerians in foreign companies in the country."

The scheme imposes fines of up to three years and jail terms of up to five years for a person or organisation that does not comply, including failure to provide accurate information.

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BBC reports that more than 150,000 expatriates in Nigeria mostly work in the oil and gas, construction, telecommunication and hospitality sectors.

It already costs companies in Nigeria $2,000(about N3 million) a year to obtain a residency permit for each foreign employee.

Expert speaks

Reacting to the new policy, Muda Yusuf, the chief executive officer of the Centre For The Promotion of Private Enterprise (CPPE), said the timeline for compliance is too short.

He said:

"The policy gave barely four weeks for companies to comply. For such a major policy shift, companies needed to be given minimum of six months.
"It is only fair and just to do so. This would be very disruptive for their businesses, plans and projections."
"Some of the companies affected are major investors that have investment billions of dollars and have been in Nigeria for decades. This administration, being an investment friendly regime, should give companies more time."

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Yusuf also expressed concern that other countries may decide to retaliate with their policies for Nigerians working abroad.

He said:

"There are serious implications for diaspora Nigerians. The policy may trigger reciprocal actions from other countries and this may affect Nigerians in diaspora.
"All of these could be at risk as a result of this policy."

Canada announces jobs for express entry visa

Meanwhile, in another report, Legit.ng revealed that Canada has released a list of job categories that will receive priority for the Express Entry visa.

The list includes teaching and plumbing, among several other professions, as the country focuses on meeting labour market demands and bridging the gap in these professions.

Skilled foreign workers in the priority job categories will have a higher chance of getting a visa through the Express Entry system.

Source: Legit.ng

Authors:
Dave Ibemere avatar

Dave Ibemere (Senior Business Editor) Dave Ibemere is a senior business editor at Legit.ng. He is a financial journalist with over a decade of experience in print and online media. He also holds a Master's degree from the University of Lagos. He is a member of the African Academy for Open-Source Investigation (AAOSI), the Nigerian Institute of Public Relations and other media think tank groups. He previously worked with The Guardian, BusinessDay, and headed the business desk at Ripples Nigeria. Email: dave.ibemere@corp.legit.ng.