The Abuja division of the Federal High Court has issued a seven-day ultimatum to the Minister of Interior, Dr Olubunmi Tunji-Ojo, and the Attorney-General of the Federation (AGF), Mr Lateef Fagbemi, SAN to file all relevant processes in a suit challenging the implementation of the new Expatriates’ Taxation Regime known as the ‘Expatriate Employment Levy (EEL)’ by the federal government.
Justice Inyang Ekwo made the order after counsel for the minister, John Otuka, sought an adjournment to enable them to correct the mistakes in their counter affidavit filed against the plaintiff’s motion for interlocutory injunction.
Justice Ekwo, who held that any application that is ripe for hearing shall be taken on the next adjourned date, adjourned the matter to March 5, 2025 for further mention.
The judge had, on January 9, ordered the Minister and the AGF to appear before him to show cause why the implementation of the proposed expatriates’ taxation regime must proceed.
The order followed an ex-parte motion by Patrick Peter, counsel who appeared for the plaintiff, Incorporated Trustees of New Kosol Welfare Initiative.
The judge also ordered that the Minister and the AGF be served with the motion within three days of the order.
The plaintiff had, in the motion marked: FHC/ABJ/CD/1780/2024, and filed by his counsel, Paul Atayi, sued the Interior Minister and AGF as 1st and 2nd defendants, seeking an order of interim injunction restraining the defendants from commencing the implementation of the new expatriates’ taxation regime known as the ‘Expatriate Employment Levy (EEL)’ in Nigeria, pending the hearing and determination of the motion on notice.
When the matter was called, Atayi, who represented the plaintiff, informed the court that the matter was scheduled for hearing, explaining that subject to the convenience of the court, he was ready to move their motion for interlocutory injunction.
Although Otuka confirmed that they had been served by the plaintiff, he said they filed their counter affidavit the previous day but observed there was a mistake in the heading.
The lawyer, therefore, sought an adjournment to enable them to correct the mistake.
“You filed a counter affidavit against non-existing originating summons,” the judge said sarcastically.
“It was a mistake my lord,” Otuka responded.
AGF’s lawyer, Enoch Simon, also confirmed the receipt of the plaintiff’s documents.
Simon said, in response, they had filed a memorandum of conditional appearance, a counter affidavit and a statement of defence.
He said they equally intended to file a notice of preliminary objection.
The AGF’s lawyer, however, said that they were still within time to file because they were served on Jan. 13.
Atayi, who expressed surprise at the response of the defence lawyers, prayed the court to grant him leave to take their motion.
He said if the matter was adjourned without taking his motion, the defendants might tamper with the subject matter (res) of the suit.
But Justice Ekwo noted that since the parties had submitted themselves to the jurisdiction of the court, the plaintiff should rest assured that the status quo shall be maintained.
The judge then asked Simon how many days they still had to file all their applications, and the lawyer said 20 days.
“Even if you have forever to file, you have submitted to the jurisdiction of the court already,” Justice Ekwo said, adjourning the matter to March 5 for further mention.
“Parties are hereby ordered to file all relevant processes seven days before that day,” he declared.
When the matter came up on Jan. 16, no lawyer appeared for the Minister and the AGF, prompting the court to fix today (yesterday, Thursday, January 23) for the matter.
The plaintiff’s Programme Implementation Coordinator, Raphael Ezeh, in the affidavit he deposed to, averred that on Tuesday, Feb. 27, 2024, the Federal Government of Nigeria unveiled a set of proposed new taxation policies called the Expatriate Employment Levy (EEL).
“According to KPMG and other online information analysts and dissemination agencies, the Federal Government intends to compel all companies and organisations which 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,” he said.
Ezeh averred that the Federal Government also planned additional regulations consisting of penalties and sanctions for non-compliance with the proposed taxation regime.
According to him, inaccurate or incomplete reporting will attract five years’ imprisonment and/or N1 million.
He said failure of a corporate entity to file EEL within 30 day is to attract a penalty of N3 million, failure to register an employee within 30 days will also attract N3 million, while submission of false information will attract N3 million.
The coordinator said failure to renew EEL before its expiry date by an organisation is to attract a sanction of N3 million.
Ezeh said: “The proposed taxation regime is totally an anti-people policy because of its radical effect on different aspects of the Nigerian economy and it works like a choke-hold against the economic growth of the nation.”
He said taxation is a sensitive matter which, under the 1999 Constitution (as amended), calls for the collaboration of the executive and legislative arms of government.
He said under Section 59 of the constitution, the executive arm of government alone does not have the powers to impose tax on corporate bodies and other citizens of the nation.
He said the current prevailing tax regime is far more friendly towards expatriates than the proposed one.
Ezeh alleged that the minister is about to commence full implementation of the EEL.
“If the defendants are not restrained by an order of this honourable court, they will commence full implementation of the said programme and thereby threaten the nation’s economic sustainability,” he said.
He said the plaintiff undertook to pay damages if the substantive suit turned out to be frivolous.
After listening to Peter, Justice Ekwo ordered the plaintiff to put the defendants on notice of the ex-parte application within three days of the order.
He said: “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 Federal Ministry of Interior had, in 2024, suspended the implementation of the EEL which was launched on February 27, 2024, to allow for further consultations with the Nigerian Association of Chambers of Commerce, Industry, Mines, and Agriculture (NACCIMA) and other vital stakeholders.
