The Trade Union Congress of Nigeria has called for an increase in the tax exemption threshold from N800,000 to N2.5 million annually to alleviate economic hardships faced by low-income earners.
In a signed statement, TUC President Festus Osifo emphasized that raising the tax exemption threshold would offer much-needed relief to Nigerians within the affected income bracket. He explained that the adjustment would help alleviate their severe economic challenges by increasing their disposable income.
In its stance on the proposed tax reform bills, Osifo acknowledged the removal of the phased VAT increase and the gradual defunding of TETFUND and NASENI. However, the TUC welcomed the introduction of a derivation component in VAT distribution among the three tiers of government, which they believe would boost productivity at the sub-national level and shift Nigeria towards a derivation-based system. On the other hand, the TUC raised concerns about the potential for significant revenue losses if royalty collection is transferred to the Nigeria Revenue Service, citing the agency’s lack of expertise in oil and gas operations.
The union appreciated the Federal Government for considering its input on the proposed tax reform bills. However, it urged the government to reconsider assigning tax collection to an agency that lacks the necessary expertise.
The TUC has joined the governors in opposing any increase to the current 7.5% Value Added Tax (VAT), stating that maintaining the rate is in the nation’s best interest. In a statement, the TUC emphasized that raising VAT would place additional financial strain on Nigerians, many of whom are already facing economic challenges.
With inflation, unemployment, and the cost of living on the rise, the union warned that higher taxes would further burden households and businesses, potentially slowing economic growth and diminishing consumer purchasing power.
The TUC praised the government for preserving the Tertiary Education Trust Fund (TETFUND) and the National Agency for Science and Engineering Infrastructure (NASENI), emphasizing their crucial roles in advancing education and technological development.
“These institutions have significantly improved tertiary education and fostered homegrown technologies. Their continued existence is vital for sustained progress in education, technology, and national development,” said Osifo.
The TUC further called on the Federal Government to implement tax policies prioritizing citizens’ welfare and promoting equitable economic growth. Osifo expressed appreciation for the government’s efforts to listen and adjust to their advocacy but emphasized the need for the concerns raised to be considered and adopted in the Tax Reform Bill, as they would greatly benefit both the government and the Nigerian public.
He stated, “The Trade Union Congress of Nigeria has a shared responsibility to promote policies that improve the lives of Nigerians, especially workers. We believe that proactive measures, when implemented, are for the greater good of citizens and reflect sincere leadership. As discussions on the Tax Reform Bill continue, we expect the focus to be on equitable economic growth and better living conditions for all Nigerians.”
