Emmanuel Thomas, Lagos
August 11, 2015 – The proposed plan to double the rate of value-added tax (VAT) from 5 to 10 percent to shore up government revenue has attracted outright condemnation from the Trade Union Congress of Nigeria (TUC).
Government considered the increase following general fall in the price of oil in the international market to enable it shore up revenue for government.
In a statement issued by TUC President, Comrade Bobboi Bala Kaigama, and Secretary General, Comrade Musa Lawal, the TUC said the 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 TUC said.
The statement observed that the VAT increment proposal muted by Sunday Ogungbesan, Acting Executive Chairman of the Federal Inland Revenue Service (FIRS), runs contrary to the agenda of the President 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 the Ogungbesan’s claim that the tax regime undermines the ability of the president to deliver on his campaign promises.
“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,” it added.
The statement further noted that 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 boss opined that the country can 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 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 Mr. Chairman need not be reminded that Nigeria can and should also generate substantial revenue from bitumen, tin, gold, limestone, iron ore, coal, etc,” the statement insisted.
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 labour leaders emphasised.
