TUC, Sharia council reject proposed VAT increase from 7.5%

The Trade Union Congress of Nigeria (TUC) and the Supreme Council for Shari’ah in Nigeria (SCSN) have firmly opposed the proposed gradual increase in Value Added Tax (VAT) from 7.5% to 15%, as outlined in the Tax Reform Bills.

Festus Osifo, TUC President, represented by Nuhu Toro, the Congress’s Secretary-General, at the ongoing public hearing on the Tax Reform Bills at the House of Representatives, stressed that maintaining VAT at 7.5% is in the best interest of the nation. He argued that any increase would impose an additional financial burden on Nigerians, many of whom are already grappling with economic hardship.

“The proposed increase is coming at a time of rising inflation and unemployment. Higher taxes will further strain households and businesses, potentially slowing down the economy,” he stated.

Osifo further recommended raising the tax exemption threshold from the proposed ₦800,000 to ₦2.5 million per annum. This, he argued, would provide relief to struggling Nigerians within that income bracket, easing their economic challenges and increasing their disposable income.

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Additionally, the TUC president rejected a proposed section of the bill that seeks to scrap and defund the Tertiary Education Trust Fund (TETFUND) and the National Agency for Science and Engineering Infrastructure (NASENI). He maintained that both institutions have significantly contributed to national development through their respective mandates.

Osifo also expressed concerns over the proposed Nigerian Revenue Service Bill, which aims to transfer the responsibility of collecting royalties and other revenues in the oil and gas sector from the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) to the new revenue agency.

He noted that the Petroleum and Natural Gas Senior Staff Association of Nigeria (PENGASSAN), an affiliate of the TUC, had already submitted a position paper opposing this move, and the TUC fully aligns with PENGASSAN’s stance.

Similarly, Ahmed Bello, a representative of the Supreme Council for Shari’ah in Nigeria, supported the TUC’s position on VAT. He suggested that the government should consider reducing VAT back to 5% or, at the very least, maintain the current 7.5%, given the prevailing economic realities in the country.