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.
TUC, in a statement 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?