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The Ministry of Interior Introduces Expatriate Employment Levy

 In a bid to drive economic growth and foster local workforce development, the Ministry of Interior (the “Ministry”) launched the Expatriate Employment Levy (the “Levy”) on Tuesday, 27th February 2024. This significant move represents a pivotal moment in the country’s ongoing efforts to achieve economic balance and enhance the development of local talents, as well as increase the tax net. The initiative also aims to narrow the wage disparities between expatriates and Nigerian employees.

The key objectives of the Levy include promoting skill transfer and knowledge exchange, ensuring a balance between economic advancement and social well-being, strengthening collaboration between the public and private sectors, and addressing demographic changes.

The following are important points to note:

  1. The Levy is applicable to non-citizens employed within Nigeria.
  2. The Levy covers employers in businesses, such as: multinational corporations, SMEs and other entities engaged in expatriate talents.
  3. Certain employment circumstance may warrant an application of the Levy Status, such as the issuance of work/residence permits, the renewal of employment contracts, or the change of an expatriate status.
  4. The Levy aims at encouraging companies to prioritise Nigerian citizens in their hiring.
  5. The Immigration Service is charged with the responsibility of enforcing the Levy.
  6. An expatriate employed for a duration of not less than 183 days within a year is liable to pay the Levy on an annual basis.
  7. There will be sanctions, if companies fail, refuse or neglect to comply.
  8. The Levy will be computed at $15,000 for every expatriate on director level and $10,000 for those on other levels.

However, the Ministry of Interior announced the temporary suspension of the Levy, following a meeting held on the 8th of March 2024 with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (“NACCIMA”). The Ministry announced that the purpose of the temporary suspension was to consult further with stakeholders in the industry.

The Employment Expatriate Levy Handbook is available here.

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