The Trade Union Congress (TUC) has rejected the Federal Government’s plan to raise the Value Added Tax (VAT) rate, arguing that such a move would aggravate the economic difficulties faced by Nigerians.
Under the proposed Tax Reform Bills, the government intends to increase VAT in phases from the current 7.5 per cent to 10 per cent, 12.5 per cent, and eventually 15 per cent.
The TUC described the proposal as poorly timed and harmful, given the existing economic pressures on citizens, including high inflation, rising unemployment, and escalating living costs.
Addressing journalists in Abuja on Tuesday, TUC President Festus Osifo stressed that maintaining the VAT rate at 7.5 per cent is critical to avoiding further strain on Nigerians.
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“Any increase in VAT at this time would exacerbate the financial burden on families and businesses already grappling with economic hardships.
“The government must prioritise policies that protect citizens’ welfare and stimulate economic recovery, not further stifle it,” Osifo stated.
The union also proposed a revision of the current tax exemption threshold, urging the government to raise it from N800,000 to N2.5 million annually.
Osifo noted that this adjustment would alleviate the financial pressures on low-income earners and boost economic activity.
“Increasing the tax exemption threshold to N2.5 million per annum would provide much-needed relief to vulnerable Nigerians, enhance disposable incomes, and foster economic growth,” he explained.
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The TUC also criticised the government’s plan to transfer royalty collection duties from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to the Nigeria Revenue Service (NRS).
The union warned that this shift could lead to inefficiencies, revenue losses, and reduced investor confidence, as the NRS lacks the technical expertise required for such specialised tasks.
“Royalty determination in the oil and gas sector is a complex process requiring technical knowledge that resides within the NUPRC,” Osifo cautioned. “Handing this responsibility to the NRS could undermine accurate assessments and create enforcement challenges.”
Despite its concerns, the TUC commended the government for retaining the Tertiary Education Trust Fund (TETFund) and the National Agency for Science and Engineering Infrastructure (NASENI). Osifo highlighted these institutions’ crucial roles in advancing education and technological innovation.
“These agencies have been instrumental in improving higher education and fostering indigenous technology development. Preserving their mandates is essential for the nation’s progress,” he said.
The TUC urged the FG to adopt tax policies that prioritise equitable economic growth and improve living standards.
Osifo emphasised that the union remains committed to championing reforms that reflect genuine leadership and address the needs of the people.
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“As deliberations on the Tax Reform Bills continue, we call on the government to focus on creating policies that uplift citizens and support sustainable economic growth,” he said.
The TUC reiterated its pledge to advocate for citizen-centric reforms that promote fairness, economic stability, and long-term prosperity.
