The Trade Union Congress (TUC) vehemently condemns the tax reform bill’s plan to raise VAT from 7.5% to 15% by 2030, arguing it will disproportionately burden workers.
Consequently, they urge the government to abandon this proposal immediately and prioritize protecting household incomes.
Arguing the hike disproportionately harms workers, the TUC criticized its phased increase to 12.5% between 2026 and 2029.
During Wednesday’s House of Representatives Committee hearing, lawmakers clashed over the proposal as critics warned of rising living costs. The debate intensified when officials defended the timeline, claiming gradual adjustments would ease economic strain.
At the hearing, Secretary-General Nuhu Toro represented TUC National President Festus Osifo and argued that raising VAT would deepen economic hardships for Nigerian workers and families. He emphasized maintaining the current 7.5% rate serves Nigeria’s “best interest,” urging lawmakers to prioritize public welfare.
“The TUC firmly opposes incremental VAT hikes from 7.5% to 15%,” Osifo stated. “Higher rates burden citizens, many already struggling with soaring inflation and economic instability.”
It will further strain households and businesses, which might eventually slow down the economy. We strongly believe VAT should remain at 7.5 percent.”
The TUC also called for an increase in the tax exemption threshold to provide relief for low-income earners.
Osifo proposed increasing the annual exemption threshold from ₦800,000 to ₦2.5 million, arguing this adjustment would reduce economic pressures on Nigerians and boost disposable income.
Additionally, the TUC opposed scrapping institutions like TETFund and NASENI, stressing their critical roles in advancing education and technology. Osifo emphasized their continued funding remains vital for sustaining educational, technological, and economic progress.
He suggested that their governing laws could be reviewed to enhance transparency and optimize performance rather than dismantling them.
The TUC has opposed transferring royalty collection duties from the NUPRC to the Nigeria Revenue Service, citing potential risks. Additionally, Osifo confirmed PENGASSAN’s position paper aligns with the TUC’s stance, which it fully endorses.
Rejecting the proposed VAT hike, Nigeria’s Supreme Council for Shari’ah insisted on either a 5% rate or retaining the current 7.5%.
Separately, Customs Comptroller-General Adewale Adeniyi warned jurisdictional conflicts in the joint revenue bill risk disrupting agency operations, citing Sections 23, 29, and 41a.
As debates intensify, stakeholders urge lawmakers to amend provisions exacerbating economic strain while prioritizing citizen relief and sustainable development initiatives.