TUC kicks against VAT hike, warns of more hardship

Story by Dajen Comfort Yakubu 

The Trade Union Congress of Nigeria (TUC) has strongly opposed the proposed increase in the Value Added Tax (VAT) rate under the Federal Government’s Tax Reform Bills, warning that the hike would worsen the financial struggles faced by Nigerians.

The government aims to gradually raise VAT from 7.5% to 10%, then 12.5%, and eventually 15%. The TUC, however, argues that such a move would exacerbate inflation, unemployment, and the escalating cost of living.

Speaking at a press briefing in Abuja after the TUC’s National Executive Council meeting, the union’s President Festus Osifo emphasized that maintaining VAT at 7.5% was crucial to alleviating the financial strain on households and businesses.

“Raising VAT now would put even more pressure on Nigerians already struggling with high living costs,” Osifo said.

The TUC further called for an increase in the tax exemption threshold, proposing it be raised from ₦800,000 to ₦2.5 million per annum to provide relief to low-income earners.

“This adjustment would allow more disposable income and stimulate economic activity,” Osifo explained.

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Additionally, the TUC raised concerns about a proposed shift of royalty collection from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to the Nigeria Revenue Service (NRS), arguing that it could lead to inaccuracies and reduced investor confidence due to NRS’s lack of technical expertise in the oil and gas sector.

Despite these concerns, the TUC commended the government’s decision to maintain the Tertiary Education Trust Fund and the National Agency for Science and Engineering Infrastructure, recognising their importance to Nigeria’s education and technological development.

Osifo called on the government to prioritise policies that support the welfare of citizens and promote sustainable economic growth, urging a focus on improving living conditions for all Nigerians as the Tax Reform Bill discussions continue.

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