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NLC OPPOSES INCREASE IN VAT

By NBF NEWS

NLC President, Mr. Abdulwaheed Omar
The Nigeria Labour Congress on Monday said any increase in Value Added Tax would impoverish more Nigerians and urged the Federal Government to seek options to buoy revenue.

The NLC President, Mr. Abdulwaheed Omar, gave the warning at the 122nd meeting of the Joint Tax Board in Abuja.

The VAT currently stands on five per cent, but the Federal Inland Revenue Service, had proposed a review to 10 per cent, an idea that was challenged by the labour union.

News Agency of Nigeria reported that Omar, represented by the Chief Economist of the NLC, Dr Peter Eson, advised government to introduce wealth tax that would progressively tax people according to their earnings and net worth.

'Within the past week, there have been reports that this matter is being canvassed again, this time as a way of financing the police.

'We (NLC) have argued, in the past and continue to insist, that given the regressive nature of VAT, raising the rate will compound the position of the poor and the workers.

'We urge the tax authorities to explore other areas such as wealth tax, which is a progressive tax. In addition, it needs to be emphasised that tax as an important instrument needs to be carefully employed to grow economy, '' he said.

According to him, long term tax revenues can be expanded by growing the economy and broadening the tax base of the country in the short term.

Omar described the income tax, charged on the consolidated salary of workers, as excessive, adding that the tax burden had removed the benefits of the consolidated salary structure from public servants.

'The Ernest Shonekan Committee had envisaged that there would be need for an amendment to the Personal Income Tax law, to avoid this escalation in the burden of the workers.

'The administration of the law from state to state has led to industrial actions in some states. Under the pressure to increase internally generated revenue, some states now apply the law in a manner that has greatly reduced the take home of the workers,' he said.

Omar stressed the need to review the law to maintain the average burden on workers at the pre-consolidation stage.

According to him, public servants bear the burden of paying taxes, while professionals in private service enjoy incomes with little or no taxes.

The representative of the Academic Staff Union of Universities, Dr. Ayo Olowe, said tax laws must be streamlined and made compliable for payment of taxes to be made easier in the country.

Olowe called on the FIRS to provide a single, continuous campaign on the benefits of taxes to get people to comply.

He said the government should also be more transparent, accountable and forthcoming, in providing effective utilities to encourage compliance.

In his remark, the Chairman, Gombe State Board of Internal Revenue, Malam Alkali Baba, said the payment of tax had always been a constitutional issue which must be complied with.

Baba said it was wrong to ask government to provide amenities before spreading the tax net, noting that tax payment should precede provision of utilities.

Baba said ASUU members had been reluctant in payment of taxes, in spite of the increase in their earnings.

He added that it was necessary for academics to factor in the payment of taxes when asking for the review of salaries and allowances.