The Trade Union Congress has advocated that the Value Added Tax rate remains at 7.5 percent as any increase will place additional financial burden on Nigerians.
The President of the TUC, Festus Osifo, stated the position of the union in a statement he issued to newsmen on Tuesday in Abuja.
According to him, many Nigerians are already struggling with economic challenges, so allowing the Value VAT rate to remain at 7.5 percent is in the best interest of the nation.
Osifo said: “Increasing VAT would place an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.
“At a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses.”
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Osifo, however, said that the congress welcomes the inclusion of the derivation component in the Value Added Tax distribution amongst the three tiers of government.
He said that when passed into law and properly implemented, it would encourage productivity at the sub-national level.
He also said that the threshold for tax exemptions should be increased from the current N800,000 per annum, as proposed in the bill, to N2.5 million per annum.
He added that this would provide relief to struggling Nigerians within the income bracket, easing the excruciating economic challenges they face by increasing their disposable income.
Osifo also explained that the proposed bill assigning royalty collection to the Nigeria Revenue Service appeared beneficial on the surface but would most likely result in significant revenue losses for the government.
He said royalty determination and reconciliation required specialised technical expertise in oil and gas operations which NUPRC possessed but NRS lacks, potentially leading to inaccurate assessments and enforcement issues.
“Additionally, this shift would create regulatory burdens, increase compliance costs for industry players, and reduce investor confidence due to overlapping functions and inefficiencies between NUPRC and NRS,” he said.
Osifo, however, said that the union had a shared responsibility to promote policies that would improve the lives of Nigerians amongst whom are workers.
He added: “We believe that proactive measures, when implemented, are for the maximum good of the citizens and evidences of great and sincere leadership.
“As the conversations around the Tax Reform Bill continue, it is our expectations that the focus would be on equitable economic growth and improved living conditions for all Nigerians.”
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