TUC Canvasses Pro-people Tax Reforms, Rejects Hike In VAT
The Trade Union Congress of Nigeria (TUC), has declared its total rejection for an increase in Value Added Tax (VAT), as contained in the President Bola Ahmed Tinubu-led Federal Government’s Tax Reform Bills.
It warned that the move would worsen the economic hardship being faced by Nigerians.
This was as the TUC called on the Federal Government to adopt tax policies that prioritise the welfare of citizens and promote equitable economic growth.
The Federal Government is proposing a phased increase in VAT from the current 7.5% to 10%, 12.5%, and ultimately 15%.
Taking a critical look at the proposal, TUC stressed that it was ill-timed and detrimental to the welfare of citizens that are grappling with inflation, unemployment, and a soaring cost of living.
President of TUC, Comrade Festus Osifo, who stated the position of the Congress at a press conference in Abuja on Tuesday, January 21, 2025, insisted that maintaining the VAT rate at 7.5 per cent was crucial to safeguarding Nigerians from additional financial burdens.
Osifo further said; “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.
“With inflation, unemployment, and the cost of living on the rise, higher taxes could stifle economic growth and erode consumer purchasing power,” he stressed.
The TUC also called for a review of the tax exemption threshold, tasking the government to raise it from N800,000 to N2.5 million per annum to ease the financial strain on low-income earners.
The TUC said; “This measure would increase disposable income, stimulate economic activity, and provide relief to struggling Nigerians. 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”.
This was as it 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.
In the words of TUC; “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,” it warned.
The TUC 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.
It further said; “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.
“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,” Osifo said.
The Congress assured of its commitment to advocating for policies that enhance the well-being of Nigerians, stressing that proactive and citizen-centred reforms reflect true leadership.
