Labour rejects planned 100% increase on VAT

*Says it’ll worsen poverty level LAGOS — Trade Union Congress of Nigeria, TUC, has condemned the plan to double the Value Added Tax, VAT, from five per cent to 10 per cent, to shore up government revenue which has been eroded by declining international price of oil, warning that it will worsen poverty in Nigeria. File photo : NLC’s protest on minimum wage. TUC, in a statement yesterday, contended that the VAT increment proposal by Sunday Ogungbesan, Acting Executive Chairman of the Federal Inland Revenue Service, FIRS, runs contrary to the agenda of the President Muhammadu Buhari-led government centred on restoring hope to the masses, reducing the poverty level among the citizens and building a new Nigeria that the entire citizenry will be proud of. In the statement by the group’s President and Secretary General, Bobboi Bala Kaigama and Musa Lawal, respectively, TUC disagreed with Ogungbesan’s claim that the tax regime undermines the ability of the president to deliver on his campaign promises. According to the statement, “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. The chairman needs not preach that; he should save us the stress. After all, even the president was aware of the current scenario when he made the 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 proposed increment will enthrone poverty and create untold hardship in all spheres of life, as most goods consumed by the masses attract VAT. “Just as it 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 boss opined that the country can survive without oil. That is 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 five percent, 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 FIRS need not be reminded that Nigeria can and should also generate substantial revenue from bitumen, tin, gold, limestone, iron ore, coal, etc. “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 per cent of the projected tax revenue? Our answer is a capital “NO” because they have been involved in 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.”