The President Muhammadu Buhari-led Federal Government has been advised to reduce cost of projects rather than increase the percentage of Value Added Tax as a measure for actualizing the payment of the new national minimum wage.
Governor David Umahi of Ebonyi State gave the advice on Wednesday while addressing civil servants in his office at the Government House, Abakaliki.
The workers had organised themselves to officially welcome the Governor to the Office after the elections and to congratulate him for his victory at the polls.
Addressing them, Umahi observed that the indication by the Federal Government to increase VAT from the current 5 per cent to 7.5 per cent to meet the demands for the new National Minimum Wage would tantamount to “digging a hole to fill a hole”.
Umahi lamented that such a move would create more hardship for the civil servants in particular and the country in general and called on organized labour to sit down with Government to analyse the plan.
According to him, increase in VAT would render the new wage meaningless as prices of goods were bound to increase geometrically.
Umahi, who acknowledged the precarious situation of the Nigerian worker, however, observed that there is no amount of money paid to civil servants that would be enough to meet their ever increasing needs.
He maintained that the best panacea to the sorry condition of workers was to encourage them to engage in other productive ventures for self sustenance, which, he noted, had remained the focal point of his administration.
He further admonished the workers to take advantage of the State Government’s financial leverages and loan privileges to engage in agriculture and other forms of enterprise for their added welfare.
Stressing that his government would drastically reduce cash incentives in its second tenure, he emphasized that more opportunities would be created for both the civil servants and other citizens to improve their lots through personal enterprise.
Umahi explained: “I saw in a paper where federal government is considering lifting VAT to 7.5 per cent to pay salaries.
“That is all about digging a hole to fill a hole because we have not come to a point of realization or honesty on how to solve our problems, and it is important.
“Federal government is borrowing money, state has been banned from borrowing money.
“And so, if VAT is lifted from 5 per cent to 35 per cent, which means that any of us that is going to buy anything is going to pay 30 per cent more than what it used to be.
“It is important, therefore, that labour sits down with government.
“There is no fraud that goes on in public service that is not being orchestrated by civil servants and if we can pluck down the stealing or cut down the cost of projects, we should be able to have enough to cater for civil servants and non-civil servants.
“We are in for deeper problems all over the nations.
“We all need to sit down and look at the problems and how to solve it.
“No Governor will make magic, no President will make magic.
“If they give us N2 billion and the wage bill is N2 billion, you can’t make any magic.
“You pay only wage bill and then go to sleep.
“No amount of money paid to civil servants can be enough but it is only the one they make themselves that will assist them.
“If you pay somebody in grade level, may be 10, N50,000 by the minimum wage and he goes to hospital, a private hospital, which bills are high because they will pay VAT on the drugs, you will pay more in drugs.
“If you go to buy exercise book for your children, you will pay more.
“All the building materials will have 35 per cent VAT, cement will come up with 35 per cent VAT, meaning those who have not built houses will be struggling to build.
“You will pay more in everything.
“So by the end of the day, civil servants may be crying that we should go back to status quo and therefore the increment may not be in their interest.
“I am not against the increment but when I was talking about the minimum wage, I told you people that the Federal Government was considering doing something to enable them pay, that is by raising VAT, which is going to be tough for the country.”
Spokesperson for the workers, Collette Enyim, said they were motivated to show such a gesture to the Governor in recognition of the cordial working relationship existing between them.
Enyim appreciated the Governor for all his fatherly gestures towards them and described his victory for a second term in office as well deserved.