…Urges reduction of VAT from 7.5% to 5%
Trade Union Congress of Nigeria, TUC has asked the Federal Government to exempt low income earners, especially workers that earn N50,000 and below, from income tax.
TUC in a presentation to the Senate Committee hearing on Finance Act 2021, also argued that there should be reduction of Electronic Money Transfer levy of N50 to N10 because of multiple taxation. Presenting TUC position, its President, Quadri Olaleye said “as it stands efforts should be geared towards economic development and how to save the few available jobs, and not burdening organisations and workers with multiple taxation and other inhibitions that stifle businesses.
There should be reduction of Electronic Money Transfer levy of N50 to N10 because of multiple taxes. The levy should only affect transfer of N50, 000.00 or more and the sharing formula of 15 percent to the Federal and 85 percent to the states should be maintained.”
On PAYE/Personal Income Tax, he said “any person or workers receiving as low as N50, 000.00 per month should be exempted from Personal Income Tax. The N30, 000.00 in the law should be increased to N50, 000.00 as tax relief to low-income earners.”According to him, ”the current rate of Value Added Tax, VAT, should be reduced from 7.5 percent to its original rate of 5 percent because organisations and workers are already contending with multiple taxes which to a large extent are discouraging investors.”
On capital gain tax, he said; “the sums obtained by way of compensation for loss of office, be increased to a maximum of N50, 000,000.00 from its original amount of N10, 000,000.00. This amount (N50, 000,000.00) should not be chargeable gain and should not be subjected to tax under this Act, provided that any sum in excess of N50, 000, 000. 00 shall not be so exempt but the excess amount shall be chargeable gain and subject to tax accordingly.
The capital allowance under small scale businesses should be allowed to be brought forward and also not be taxed.”TUC also contended that “tax should be exempted from premium paid to insurance company by an individual in respect of insurance of his life or that of his spouse or contract of deferred annuity to his own life or that of his spouse. This will serve as a big relief for insurance policy holders.
The Federal Government and all policy makers should churn out policies that would be all inclusive, re-distribute wealth and re-direct social economic behaviour of the people. Unless this is done Nigeria may end up being a spectator in the African Continental Free Trade Agreement, AfCFTA as no consuming nation would be able to play any significant role.”All affiliates of Congress are currently flooded with letters from organizations requesting redundancy negotiations. To save the few available jobs government must adequately consider its policies.”
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