Written by Success Chimdimma Ebulue (Esq)

From Patrick Okoh & Co Legal


On the 27th of February 2024, the Federal Government of Nigeria (FGN) introduced the Expatriate Employment Levy (EEL)1 – a mandatory financial contribution imposed on employers who hire expatriate workers in Nigeria. According to the FGN, the levy was geared towards closing the gap between expatriate and the Nigerian labor force, as well as to address certain socio – economic considerations within the country. Under the policy, employers of expatriates covered by the EEL were required to pay the colossal sum of 15,000 (USD) as levies for directors and 10,000 (USD) for other categories of expatriates.

Expectedly, the new policy was received with backlash from the organized private sector and other stakeholders for reasons, amongst others that it was antithetical to attracting the much-needed Foreign Direct Investment (FDI) into the national economy. While some other stakeholders declared the policy as illegal calling for it ban, others had focused on the socio-economic implications of the policy at the time.

A Temporary Suspension

In response to the widespread criticism of the policy, the Federal Government has somewhat commendably suspended the operationalization of the policy with a plan to re-introduce it in the future, after addressing some of the issues raised by the organized private sector2. According to the statement announcing the suspension by the NACCIMA President, “it was unanimously agreed that the implementation of the Expatriate Employment Levy will be paused, allowing for further consultations with NACCIMA3 and other vital stakeholder”4 thereby giving a clear indication that the reported suspension of the policy would be temporary.

It is the considered view of this writer, that while it may seem as though the immediate suspension was driven primarily by the concern surrounding the potential impact on the national economy, particularly the feared flight of FDIs, which aligns with the predominant sentiment amongst major stakeholders, little or no attention at all, has been drawn to the potential unconstitutionality of the policy.

This article, thus, takes a critical look at the legal dimension that answers to the unconstitutionality of the policy and why its suspension, albeit temporary, was a judicious decision.

Operational dynamics of EEL

As stated earlier, the EEL is a levy imposed on employers who hire expatriate workers. The Levy ranges from 15,000 USD to 10,000 USD depending on the category of the expatriates. The levy which is mostly on the off-shore earnings of the expatriates working in Nigeria, aims to balance economic growth and workforce development by ensuring equitable contribution from the expatriate employment5. It however, in line with global best practice, exempts all accredited staff of Diplomatic Missions and government officials in line with the dictates of the Diplomatic Immunity Act.

Further, expatriate workers employed for duration of not less than 183 days within a year, shall be liable to pay the EEL on an annual basis; which duration shall be calculable on aggregate and shall not be construed to mean 183 days or more, spread over a period not exceeding one fiscal year. Not unexpectedly, failure to comply with the provisions of the EEL, including inaccurate or incomplete reporting could lead to penalties and sanctions.

The Constitutionality Question

A fundamental flaw of the EEL, in our considered opinion, beyond the economic drawbacks, is its weak legal framework. Nigeria, is a constitutional democracy and every action of government, in line with the principles of Rule of Law, must be according to law. Where the contrary is the case, it begs the country’s constitutional and democratic posturing, at least in principle.

Now, to the extent that the EEL strikes at the earnings of expatriate workers, it unwittingly acquires the character of a Labor Tax, thereby subject to the prevailing constitutional provision governing tax regime in Nigeria. It must be underscored, that Taxation in Nigeria has a legal mandate; it is not arbitrary, and under no circumstances, can new layers of tax be introduced by a mere government policy or executive fiat. On the contrary, it must follow the due process of law enshrined in the relevant statute or Constitution.

Under Nigeria’s fiscal federalism, the powers to make any law that imposes any form of tax resides only with the legislative arm of government. In matters accommodated under the Exclusive Legislative List, such as Immigration, which is where the EEL anchors, it follows that it is only a law enacted by the National Assembly that could create a new layer of tax on expatriates such as those intended by the EEL. This is because, under the provision of Section 4 of 1999 Constitution of the Federal Republic of Nigeria (CFRN) as amended, the National Assembly is empowered to make laws with respect to matters included in the exclusive legislative list as set out in part 1 of the second schedule of the constitution. Thus, it is clear beyond cavil, that the above provision expressly confers exclusive authority on the National Assembly to make laws on specific matters listed thereon and with a clear and deliberate exclusion of other bodies, persons and authority. Some of the existing federal legislations in this regard include but are not limited to: Custom and Excise Duties Act, Stamp Duties Act, taxation of incomes, profit and Capital Gains Tax, Companies Income Tax, etc.

What is more, section 58 of the 1999 Constitution, leaves no doubt on the mode pr manner of exercise of Federal Legislative powers. It provides thus:

“The power of the National Assembly to make laws shall be exercised by bills passed by both the Senate and the House of Representatives and, except as otherwise provided by subsection (5) of this section, assented to by the President”

The section further provides for the procedure to pass a bill to law.

But what is perhaps more instructive in the context of the subject of this article is the provision of section 59 of the Constitution to the effect that the provisions of Section 58 of the Constitution

“shall apply to a Bill for the imposition of, or increase in any tax, duty or fee or any reduction, withdrawal or cancellation thereof”.

The above provision, in the writer’s considered opinion, answers to the inference that any law or policy targeted at the increase or introduction of any form of labour tax, on any item under the Exclusive Legislative List, such as Immigration, must find foothold in a duly enacted law of the National Assembly, failing which its constitutionalism comes under great suspicion. This, unfortunately, is the albatross of the EEL for all its otherwise nationalistic objectives.

Under the rules of interpretation of statute, it is settled that the use of the word “SHALL”, in a legislation such as in Section 59 of the Constitution, indicates a compulsion or imperative requirement6.

Thus, by a combined reading of the provisions of sections 4, 58 and 59 of the Constitution, one clear jurisprudential inference follows; namely, any law/policy that seeks to impose any levy or tax of a federal character must be a law duly passed by the National Assembly and not through vague or indistinct polices lacking statutory origin or flavour such as the Expatriate Employment levy. This is all the more so, as laws or legislation founded on tax, answer to a unique interpretation. The Court of Appeal, in the case of Ahmadu Bello & Anor v. Gov of Kogi State7, Per Dahiru Musdapher JCA (as he then was) captured the jurisprudential basis of this in a very poignant dictum thus:

“A law which imposes pecuniary burden is, under the rules of interpretation, subject to the rule of strict construction. All charges upon the subject must be imposed by clear and unambiguous language because in some degree they operate as penalties. Thus, the subject is not to be taxed unless the language of the statute clearly imposes the obligation. The language of the statute must not be strained in order to tax a transaction which, had the legislature thought of it, would have been covered by appropriate words. In a taxing legislation, therefore, one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax; no presumption at all. Nothing is to be read in and nothing is to be implied. One can only look fairly at the language used. But the strictness of interpretation may not always enure to the subject’s benefit, for if the person sought to be taxed comes within the letter of the law, he must be taxed however great the hardship may appear to the judicial mind.”

The court re-emphasized the position above in the case of F.B.I.R V Halliburton (WA) Limited8, Per Joseph Shagbaor Ikyegh JCA has this to say

“It is now obvious and settled that tax laws are narrowly or sticking to the ordinary meaning of words used therein without adding any gloss on them.”
See also the cases of Okupe v F.B.I.R9 and Aderawos Trading Co Ltd10 as they are also instructive in this regard.

Thus, it is the writer’s submission that the EEL having not been codified in a written law duly enacted by the National Assembly, fails to pass the test of constitutionality. It is the writer’s recommendations that further consultations towards re-introducing the policy must factor it constitutional weakness in order not to subject it to a fresh round of criticism by stakeholders in the legal sphere in the future.


Whatever the economic and labour considerations that informed the EEL, without a robust legal framework on which it may be erected, the realization of its objectives would continue to be a mirage. The writer has tried to demonstrate the constitutional pitfalls inherent in the now-suspended EEL. The writer notes that whilst the reason for its suspension were predominantly in response to the economic issues, the more lethal legal considerations have not received much attention. Failure to do this within the interlude between the suspension of the policy and its re-introduction in the future, may amount to kicking the proverbial can down the road by the Federal Government and its strategic partners and stakeholders. The intent of the EEL no matter how benevolent or well-intentioned cannot force its way into legal legitimacy. Compliance with the rules and principles of legislation discussed above and by the appropriate procedure for enactment of laws is paramount as the absence of such adherence renders such policy a nullity and the tax illegal.

1 https://eel.interior.gov.ng/welcome
Expatriate Employment Levy Handbook

2 https://punchng.com/just-in-fg-suspends-implementation-of-expatriate-employment-levy/

3 Acronym for Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture

4 https://punchng.com/fg-to-suspend-expatriate-employment-levy-naccima/

5 See Expatraite Employment Levy Objectives via the handbook supra

6 Maxwell on the interpretation on statutes twelfth edition by P.ST.J.Langan

7 (2002) 3 NWLR (PT 755) 502 @ 522
See also Russell v Scott (1948) A.C 422, Per Lord Simmonds; and D’Avigdor –Gold smith v IRC(1953) A.c 347. I.R.C V Wolfson (1949) 1ALL E.R 895 per Lord Simmons. Cape Brandy Syndicate V IRC (1921) 1KB 64, AT P. 71 approved by viscount Simon L.C in Canadian Eagle Oil co Ltd v R

8 (2016) 4NWLR pt 89

9 1974(4) SC93

10 (1965) LLR195 @ 200