The Trade Union Congress (TUC) has opposed government plans to raise Value Added Tax (VAT) from 7.5% to 15% in stages, as outlined in a new tax reform bill.
TUC President Festus Osifo argued in a press statement released that keeping VAT at 7.5% serves the nation’s interests best.
“At a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses, potentially slowing economic growth and reducing consumer purchasing power,” he said.
While the TUC supported including derivation in VAT distribution among government tiers, Osifo noted this could improve local productivity: “When passed into law and properly implemented, it will encourage productivity at the sub-national level thereby move us gradually from a total rent-seeking economy to a derivation-based system that will stimulate economic activities.”
The union suggested two key changes to the tax bills. First, they want to raise tax exemptions from ₦800,000 to ₦2,500,000 yearly to help struggling citizens. Second, they warned that letting the Nigeria Revenue Service collect royalties might reduce government income, despite seeming beneficial.
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