•TUC President Festus Osifo
The Trade Union Congress of Nigeria has opposed the proposed increase in the Value Added Tax rate, as outlined in the federal government’s Tax Reform Bills, warning that the move could worsen the economic hardship faced by Nigerians.
The federal government had proposed a phased VAT hike from the current 7.5% to 10%, 12.5%, and ultimately 15%, a move the TUC described as ill-timed and detrimental to the welfare of citizens already grappling with inflation, unemployment, and a soaring cost of living, reports The PUNCH.
Speaking during a press briefing in Abuja today, following the union’s National Executive Council meeting held on November 26, 2024, TUC President Festus Osifo said maintaining the VAT rate at 7.5 per cent was crucial to safeguarding Nigerians from additional financial pressure.
“Allowing the Value Added Tax rate to remain at 7.5 per cent is in the best interest of the nation. Increasing it now would impose an additional burden on households and businesses already struggling with economic challenges,” Osifo said.
He added, “With inflation, unemployment, and the cost of living on the rise, higher taxes could stifle economic growth and erode consumer purchasing power.”
The TUC called for a review of the tax exemption threshold, urging the government to raise it from N800,000 to N2.5 million per annum to ease the financial strain on low-income earners.
“This measure would increase disposable income, stimulate economic activity, and provide relief to struggling Nigerians,” Osifo explained.
He said, “The threshold for tax exemptions should be increased to N2,500,000 per annum. This adjustment would offer much-needed relief to low-income earners, enabling them to cope with the current economic challenges.”
The TUC also expressed reservations about the proposed transfer of royalty collection from the Nigerian Upstream Petroleum Regulatory Commission to the Nigeria Revenue Service (NRS), citing risks of revenue losses and inefficiencies.
“Royalty determination and reconciliation require specialised technical expertise in oil and gas operations, which the NUPRC possesses but the NRS lacks. This shift could result in inaccurate assessments, enforcement challenges, and reduced investor confidence,” Osifo warned.
The union commended the government’s decision to retain the Tertiary Education Trust Fund and the National Agency for Science and Engineering Infrastructure, describing their roles as pivotal to the country’s education and technological advancement.
“These institutions have significantly contributed to improving tertiary education and fostering homegrown technologies. Their continued existence is vital for sustained progress in education, technology, and national development,” Osifo said.
Osifo called on the federal government to adopt tax policies that prioritise the welfare of citizens and promote equitable economic growth.
“As discussions on the Tax Reform Bill continue, it is our hope that the focus will remain on fostering economic growth and improving living conditions for all Nigerians,” he said.
The TUC reaffirmed its commitment to advocating for policies that enhance the well-being of Nigerians, emphasising that proactive and citizen-centred reforms reflect true leadership.
