TUC Asks FG to Increase Tax Exemption Threshold to N2.5 Million, Speaks on VAT Increment
- The trade union congress has made an unusual request to the Federal government that the tax exemption limit be increased
- The union shared reasons why the limit should be increased from 1 million naira to 2.5 million naira
- TUC also spoke on the proposed phased increment of VAT, noting that Nigerians are already facing tough times
Don't miss out! Join Legit.ng's Sports News channel on WhatsApp now!
Legit.ng journalist Ruth Okwumbu-Imafidon has over a decade of experience in business reporting across digital and mainstream media.
The Trade Union Congress (TUC) leadership have called on the federal government to increase the tax exemption threshold in the new tax reform bill, to N2.5 million per annum.
In a statement signed by the TUCPresident, Festus Osifo, the union noted that the current economic realities have imposed hardships on Nigerians earning up to N2.5 million and that exempting this income bracket would provide significant relief for them.
Osifo charged the Presidential Committee on Fiscal Policy and Tax Reforms to reconsider the threshold for tax exemption and raise it to N2.5 million.
Source: Getty Images
Proposed VAT reforms
Speaking about the current status of the proposed tax reform bills, the TUC chairman commended the tax committee for including derivation in the Value Added Tax (VAT) distribution amongst the three tiers of government.
He noted that upon its being passed to law, it would gear Nigeria to a derivation-based system, and encourage states and regions to explore their productive abilities. Osifo added that this would trigger increased economic activities in the interest of Nigerians, the GUARDIAN reports.
He commented on the proposed phased VAT increment, saying that the TUC joins its voice with the governors to request that the VAT be left at 7.5%, in the best interest of the country.
Osifo stressed that Nigerians already struggle amid the economic challenges and cost-of-living crisis, and increasing VAT at this time would further burden them.
He said;
“At a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses, potentially slowing economic growth and reducing consumer purchasing power.”
Royalty collection duties to remain with NUPRC
The union raised concerns about the potential losses that could result from assigning royalty collection duties to the Nigeria Revenue Service (NRS), noting that such a move could lead to significant revenue losses for the government especially in the oil and gas sector.
The group explained that royalty determination and reconciliation, require specialized technical expertise in oil and gas operations—a capability the Nigerian Upstream Petroleum Regulatory Commission (NUPRC) possesses already. Given that the NRS lacks the same expertise, letting them handle it could result in inaccurate assessments and enforcement challenges.
Moreover, the labour body warned that the shift would impose regulatory duties, escalate compliance costs for industry players, and undermine investor confidence due to overlapping functions and inefficiencies between the NUPRC and NRS.
The group expressed gratitude to the Federal Government for considering its input in the Tax reforms and urged it to reconsider its stance on assigning tax collection to a body that may lack the expertise to perform the task effectively.
The TUC statement also commended the decision to sustain funding of TETFUND and NASENI, noting that both institutions have had a great impact on the standard of education in Nigeria.
TUC emphasized its commitment to promoting policies that enhance the lives of Nigerians, including the nation’s workers. It noted that proactive measures benefit the public and demonstrate sincere and effective leadership.
As discussions on the Tax Reform Bill continue, the group called for a focus on equitable economic growth and improved living conditions for all Nigerians.
Tax exemption for armed forces, others
Recall that in a recent Legit.ng report, the Tax Committee Chairman, Taiwo Oyedele, listed the category of Nigerians to be exempted from the income tax.
According to Oyedele, all members of the armed forces and others involved in protecting the lives of Nigerians would be exempted from the Pay As You Earn (PAYE) income tax.
Oyedele added that the bill also excludes Nigeria's lowest earners, those earning up to N83,000 monthly and N1 million annually. Under the new bill, people in these categories are to be exempted from income tax.
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
