Rita Odafe
Opposition to VAT Increase by TUC
The Trade Union Congress (TUC) of Nigeria has firmly stated its refusal to accept any proposal from the federal government to raise the Value Added Tax (VAT).
The federal authorities aim to alter VAT rates as part of their proposed Tax Reform Bills.
TUC believes that increasing VAT will only exacerbate the economic difficulties already affecting Nigerians.
The government has suggested gradually raising VAT from the current 7.5% to 10%, 12.5%, and finally to 15%. The TUC views this as poorly timed and harmful to the welfare of citizens confronting inflation, joblessness, and rising living expenses.
During a press conference in Abuja after the union’s National Executive Council meeting on November 26, 2024, TUC President Festus Osifo emphasized the importance of keeping the VAT rate stable at 7.5% to alleviate financial burdens on Nigerians.
“Keeping the Value Added Tax rate at 7.5% is crucial for the nation’s benefit. An increase would further strain households and businesses dealing with tough economic conditions,” Osifo stated.
He further remarked, “Given the growing inflation, unemployment, and high living costs, raising taxes could hinder economic growth and diminish consumer spending ability.”
TUC also called for an increase in the tax exemption threshold, proposing it be raised from N800,000 to N2.5 million per year to relieve low-income earners.
“This change would help boost disposable income, stimulate the economy, and support struggling Nigerians,” Osifo noted.
He added, “Adjusting the tax exemption threshold to N2,500,000 annually would provide essential support to low-income earners, helping them navigate the current economic struggles.”
The TUC raised concerns about the proposed shift of royalty collection from the Nigerian Upstream Petroleum Regulatory Commission to the Nigeria Revenue Service (NRS), highlighting potential revenue loss and inefficiencies.
“Accurate royalty management requires specialized knowledge in oil and gas, which the NUPRC possesses but the NRS does not, potentially leading to errors in assessments and lower investor confidence,” Osifo cautioned.
The union praised the government’s decision to preserve the Tertiary Education Trust Fund and the National Agency for Science and Engineering Infrastructure, recognizing their vital contributions to the nation’s educational and technological sectors.
“These organizations are essential for enhancing tertiary education and fostering domestic technological growth. Their continued operation is critical for ongoing progress in education, technology, and national development,” Osifo asserted.
Osifo urged the Federal Government to implement tax strategies that emphasize citizens’ welfare and encourage fair economic development.
“As talks on the Tax Reform Bill progress, we hope the emphasis remains on promoting economic growth and improving living standards for all Nigerians,” he concluded.
The TUC reiterated its dedication to advocating for policies that enhance the quality of life for Nigerians, stressing that effective, citizen-focused reforms are marks of genuine leadership.
