The TUC also proposed two critical adjustments to the tax reform bills. First, it recommended raising the tax exemption threshold from ₦800,000 to ₦2,500,000 annually to ease the financial burden on struggling citizens. Second, the union cautioned against allowing the Nigeria Revenue Service to collect royalties, arguing that this could reduce government revenue despite appearing beneficial on the surface.
Abuja, Nigeria – The Trade Union Congress (TUC) has expressed strong opposition to the Federal Government’s plan to increase Value Added Tax (VAT) from 7.5% to 15% in stages, as proposed in a new tax reform bill.
In a press statement, TUC President Festus Osifo described the proposal as a heavy financial burden on Nigerians, especially during a period of rising inflation, high unemployment, and increasing cost of living. He argued that maintaining VAT at the current rate of 7.5% is in the best interest of the country.
Osifo warned that raising VAT could negatively impact households and businesses by reducing consumer purchasing power and slowing economic growth. “At a time like this, higher taxes would only worsen the financial strain on Nigerians and hinder economic recovery,” he said.
While the union expressed reservations about the VAT hike, it supported including a derivation formula in VAT distribution among the tiers of government. Osifo noted that this move, when properly implemented, could promote local productivity. “It will gradually shift the country from a rent-seeking economy to a derivation-based system that encourages economic activity at the sub-national level,” he added.
The TUC also proposed two critical adjustments to the tax reform bills. First, it recommended raising the tax exemption threshold from ₦800,000 to ₦2,500,000 annually to ease the financial burden on struggling citizens. Second, the union cautioned against allowing the Nigeria Revenue Service to collect royalties, arguing that this could reduce government revenue despite appearing beneficial on the surface.
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