Tax Reform Bill –TUC Wants VAT Rate At 7.5%—-The Trade Union Congress has advocated that the Value Added Tax rate remains at 7.5 per cent as any increase will place additional financial burden on Nigerians.
Mr Festus Osifo, TUC President said this in a statement on Tuesday in Abuja.
According to him, many Nigerians are already struggling with economic challenges, allowing the Value VAT rate to remain at 7.5 per cent is in the best interest of the nation.
“Increasing VAT would place an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.
”At a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses,”he said.
Osifo, however, said that the congress welcome the inclusion of derivation component in the Value Added Tax distribution amongst the three tiers of government.
He said that when passed into law and properly implemented, it would encourage productivity at the sub-national level.
He also said that the threshold for tax exemptions should be increased from the current ₦800,000 per annum, as proposed in the bill, to ₦2,500,000 per annum.
He added that this would provide relief to struggling Nigerians within the income bracket, easing the excruciating economic challenges they face by increasing their disposable income.
Osifo also explained that the proposed bill assigning royalty collection to the Nigeria Revenue Service (NRS) appeared beneficial on the surface but would most likely result in significant revenue losses for the government.
He said royalty determination and reconciliation required specialised technical expertise in oil and gas operations which NUPRC possessed but NRS lacks, potentially leading to inaccurate assessments and enforcement issues.
”Additionally, this shift would create regulatory burdens, increase compliance costs for industry players, and reduce investor confidence due to overlapping functions and inefficiencies between NUPRC and NRS,” he said.
Osifo, however, said that the union had a shared responsibility to promote policies that would improve the lives of Nigerians amongst whom are workers.
“We believe that proactive measures, when implemented, are for the maximum good of the citizens and evidences of great and sincere leadership.
“As the conversations around the Tax Reform Bill continue, it is our expectations that the focus would be on equitable economic growth and improved living conditions for all Nigerians,” he said.
