Justice Inyang Ekwo issued the order on Thursday while ruling on an ex-parte motion filed by the Incorporated Trustees of New Kosol Welfare Initiative.
The suit, marked FHC/ABJ/CD/1780/2024, lists the Minister of Interior and the AGF as the 1st and 2nd defendants, respectively.
The plaintiff, represented by a team of lawyers led by Paul Ajayi, and with Patrick Peter moving the motion, is seeking an interim injunction to restrain the defendants and their agencies from implementing the EEL pending the determination of the substantive suit.
Justice Ekwo directed that the defendants be served with the motion within three days and ordered them to show cause on the next hearing date why the plaintiff’s prayers should not be granted. The matter was adjourned to January 16, 2025.
The Federal Government unveiled the EEL on February 27, 2024, as part of a new taxation regime targeting companies employing expatriates.
Under the policy, companies would pay $15,000 (approximately N23 million) annually for expatriates at the director level and $10,000 (approximately N16 million) for non-director expatriates.
The Programme Implementation Coordinator for the plaintiff, Raphael Ezeh, deposed in an affidavit that the proposed levy imposes severe penalties for non-compliance. These include:
He stated, “According to KPMG and other online information analysts and dissemination agencies, the Federal Government intends to compel all companies and organizations who engage the services of foreign expatriates to pay tax E.E.L. as follows:
“For every expatriate on the level of a director — Fifteen Thousand United States Dollars ($15,000.00) equivalent to Twenty-Three Million Naira, by the current exchange rates (NW23,000,000.00) per annum.
“For every expatriate on a non-director level – Ten Thousand United States Dollars ($10,000.00) equivalent to Sixteen Million Naira, by the current exchange rates (N16,000,000.00) per annum.”
Ezeh described the policy as “anti-people” and a potential chokehold on the nation’s economic growth, emphasizing its radical impact on various sectors of the economy.
Ezeh argued that the taxation policy breaches constitutional provisions, particularly Section 59 of the 1999 Constitution (as amended), which mandates collaboration between the executive and legislative arms of government on tax matters.
He also pointed out that the existing tax regime is more favorable to expatriates compared to the proposed policy.
According to Ezeh, the Minister of Interior is allegedly set to commence full implementation of the EEL, which he claims threatens Nigeria’s economic sustainability.
“If the defendants are not restrained, they will implement the policy, thereby jeopardizing the nation’s economy,” he said.
In his ruling, Justice Ekwo stated, “Upon being served, the defendants are hereby ordered to show cause why the prayers of the plaintiff ought not to be granted on the next date of hearing.”
The court emphasized the plaintiff’s commitment to pay damages if the substantive suit proves frivolous. The case has been scheduled for hearing on January 16, 2025.
