Trade Union Congress opposes proposed VAT increase
MEMBERS of Trade Union Congress (TUC) have condemned reported plan to double the rate of value-added tax (VAT) from 5 to 10 percent as part of measures to increase government revenue which has reduced drastically due to decline in international price of oil.
TUC described the move as totally uncalled, “inview of the prevailing mass poverty and destitution aggravated by the failure of many state governments to pay salaries of their workers”.
A statement issued by TUC President, Bobboi Bala Kaigama, and Secretary General, Musa Lawal, said: “This development has made it impossible for the public sector to stimulate the private and informal sectors of the economy, thereby grinding the economy to a standstill.
We therefore consider the proposed increment as evil, satanic and lacking human face.” The statement observed that the VAT increment proposal runs contrary to the agenda of the President Muhammadu Buhari-led government, which is “essentially centred on restoring hope to the masses and building a new Nigeria that the entire citizenry will be proud of”.
The TUC disagreed with claim that the tax regime undermines the ability of the president to deliver on his campaign promises, adding “The fact that the country depends on crude oil exports for over 70 percent of government revenue and over 90 percent of foreign exchange is not debatable”.
According to TUC, the president was aware of the current scenario when he made his electoral promises: “In fact, we advise the president to beware of wolves in sheep’s clothing within his administration, persons whose main motive is to play the good boys to the detriment of the people.”
The statement said: “The proposed increment will enthrone poverty and create untold hardship in all spheres of life, as most goods consumed by the masses are vatable. Just as happened after each increment in the prices of petroleum products, prices of goods will increase across board, and purchasing power will drastically reduce.
Staple food will virtually disappear from the dinner table of the average Nigerian, thereby compromising his health, and we know the implications of that in a nation where access to basic medicare is a luxury.” “The FIRS opined that the country could survive without oil. That’s true and incontrovertible.
But our worry is, why must we always choose the easy but destructive way out? Must the government always prey on the masses to achieve revenue targets and address deficits?
How efficient has the government been in monitoring and enforcing the payment of VAT at the current rate of 5 per cent, and how effective has been the utilisation of the VAT that has been collected over the years? Should the poor masses of the country be blamed if, as the chairman claims, only 125,000 out of 450,000 corporate entities pay tax to the government?
Whatever the answers to these questions may be, surely the government and Mr. Chairman (of FIRS) need not be reminded that Nigeria can and should also generate substantial revenue from bitumen, tin, gold, limestone, iron ore, coal, among others.” “Now let us ask ourselves this question; have government agencies entrusted with the responsibility of collecting taxes demonstrated the will to attain optimal collection?
In other words, have they demonstrated the courage and wherewithal to collect up to 50% of the projected tax revenue? Our answer is a capital “NO” because they have been involved in alleged compromises for pecuniary considerations, a habit that has rendered useless many a Nigerian agency.
Can the government tell Nigerians how much ground rent is being collected relative to projected figures? Nigerians have come of age and no one should attempt to hoodwink us with theories that have no empirical basis. Nigerians should no longer be taken for a ride.
The TUC regards the proposed increment as the brain child of self-serving bureaucrats at the FIRS and a deliberate and calculated attempt to stir up civil unrest and create problems for the present administration.
We call on President Muhammadu Buhari to immediately call them to order before they rubbish his administration,” the statement added.