The Trade Union Congress of Nigeria (TUC) has firmly rejected the Federal Government’s proposed increase in Value Added Tax (VAT), warning that the move could worsen the already dire economic situation for Nigerians.
The proposal, part of the Federal Government’s Tax Reform Bills, outlines a phased VAT increase from 7.5% to 10%, 12.5%, and eventually 15%.
However, the TUC has criticized this plan, describing it as “ill-timed” and detrimental to Nigerians already grappling with high inflation, unemployment, and skyrocketing living costs.
TUC Advocates for Economic Relief
During a press briefing in Abuja, TUC President Festus Osifo urged the government to maintain the current VAT rate of 7.5% to shield households and businesses from additional financial burdens.
“Allowing VAT to remain at 7.5% is in the nation’s best interest. Any increase would place undue strain on already struggling Nigerians and businesses,” Osifo said.
He also warned that raising VAT could weaken consumer purchasing power, discourage spending, and ultimately slow down economic growth.
In addition, the TUC called on the government to raise the tax exemption threshold from ₦800,000 to ₦2.5 million annually.
This move, according to Osifo, would help low-income earners cope with Nigeria’s current economic realities.
“This measure will increase disposable income, stimulate economic activity, and offer relief to struggling Nigerians,” he added.
Concerns Over Revenue Collection
The TUC expressed reservations about transferring the collection of royalties from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to the Nigeria Revenue Service (NRS).
The union fears this shift could lead to inefficiencies, revenue losses, and reduced investor confidence.
Despite these concerns, the TUC commended the government for retaining institutions like the Tertiary Education Trust Fund (TETFund) and the National Agency for Science and Engineering Infrastructure (NASENI), acknowledging their contributions to education and technological development.
“These institutions play a crucial role in advancing education and technology. Their continued existence is essential for sustainable growth in these sectors,” Osifo stated.
A Call for Equitable Tax Policies
The TUC urged the Federal Government to adopt tax policies that prioritize citizens’ welfare, foster economic equity, and ensure sustainable growth.
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