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VAT, Workers earnings and Nigerians economy



REPORTS  are rife that there will be an upward review of the Value Added Tax. Though some groups and leaders of opinion have condemned the plan, the federal government has  not refuted the claims.

RATHER, more attention is being paid to the rumour, even as the federal government has lightly denied ever having such plan. During the occasion of his recent 67th birthday, the National Leader of the ruling party, All Progressives Congress (APC) Senator, Bola Ahmed Tinubu, advised President Muhammadu Buhari to reject the plan of any upward review of VAT.

The former governor of Lagos State reasoned that any increase in the VAT regime will increase the suffering of Nigerians who only heaved a sigh of relief some weeks ago over the news of the president’s signing of the new minimum wage. He added that such plan will not be a right way to say ‘thank you’ to Nigerians who in spite of all odds, voted for the ruling party for another four years in office.

THE matter took centre stage again in national discourse when the Director General of Manufacturers Association of Nigeria (MAN), Segun Ajayi Kadir, stated in an interview last week that any increase in VAT could send a wrong signal that the federal government is not sensitive to the plight of low and middle income earners in the country.  His words, “any upward review of VAT is akin to the government taking back from the back door what was given, especially now that the new minimum wage has been approved,”

GOVERNMENT’S denial notwithstanding, the MAN D-G insisted that if VAT was increased, the economy will be in a more vulnerable state, as the nation’s misery index will go up. He also said that given the lopsided nature of Nigeria’s income distribution pattern, the per capita income would be affected. He posited that the burden of tax increase will be shifted to consumers who are already groaning under hardship due to low purchasing power.

SPEAKING in the same vein, President of Trade Union Congress (TUC), Bobboi Kaigama, said in a separate interview that any plan to increase VAT would be calamitous to the low and middle income earners in the country. He hinted that Nigerian workers will resist any  move in that direction. He claimed  that the gains of the new minimum wage have even been affected by inflation.

WE CANNOT agree more with these voices. While not failing to note the need for workers to be more productive and strive to earn their new wages, it is apt to emphasise that their should be a national reorientation towards productivity and profitability in the public service system. We believe that with such a progressive change in the nation’s workforce and the private sector’s resolve to pay both the federal and state governments can comfortably pay the new wage without any VAT increase.

If there is also the need to plug all the holes from where public funds are frittered away. It is also our  belief that governments at all levels can cut the cost of governance by curtailing those projects that have little or no direct impact on the  lives of the citizenry to pay their workers the new wage.

THIS is why it is very apt to commend the governor of Anambra State, Chief Willie Obiano, for accepting to pay the new minimum wage as soon it becomes applicable. That shows confidence and love for the workers and example of good leadership. We enjoin other governors that feel they cannot pay the new wage to improve on their IGR and shun any urge to play politics .

FOR the workers, it is a call to work harder to reciprocate the good gestures of  government.



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