The Trade Union Congress (TUC) has opposed the Nigerian government’s proposal in one of the tax reform legislation to raise the Value-Added Tax (VAT) from the existing 7.5% to 10%, 12.5%, and then 15%.
The TUC President Festus Osifo declared in a statement on Tuesday that “it is in the best interest of the country to keep the VAT rate at 7.5%, as raising it would put an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.”
He claimed that raising taxes would put further strain on families and businesses at a time when unemployment, inflation, and living expenses are all on the rise. This might limit economic growth and lower consumer purchasing power.
According to the union, the Tertiary Education Trust Fund (TETFUND) and the National Agency for Science and Engineering Infrastructure (NASENI) have had a significant influence on the nation through their separate missions.
Credit: Lanka Sara
“Each has played a significant role in advancing our higher education system and encouraging the use of domestic technology to boost the productivity and independence of the country.”
The TUC went on to say that maintaining advancements in economic development, education, and technology nationwide depends on their continuous existence.
The TUC stated that it was pleased to see the derivation component included in the distribution of VAT across the three levels of government.
Osifo stated, “If enacted and implemented correctly, it will promote sub-national productivity and help us transition from a rent-seeking economy to a derivation-based system that will stimulate economic activity.
“But there are still two things we are adamant should be included in the tax bills since they will greatly help Nigerians. As the law suggests, the annual threshold for tax exemptions should be raised from the existing ₦800,000 to ₦2,500,000. This will increase their disposable income and alleviate the severe economic hardships that struggling Nigerians in that income range endure.
“The Nigeria Revenue Service (NRS) would be tasked with collecting royalties under the proposed bill, which seems advantageous on the surface but would probably cause the government to lose a lot of money.”
