Trade Union Congress (TUC) has charged the Taiwo Oyedele-led Presidential Fiscal Policy and Tax Reforms Committee to expand the threshold for tax exemption from N800,000 to N2.5 million.

TUC President, Festus Osifo, who stated this yesterday in a signed statement, argued that the review would provide relief to struggling Nigerians within the income bracket, easing the excruciating economic challenges they face by increasing their disposable income.

In the position on the proposed tax reform bills before the National Assembly, Osifo noted that while halting the phased increment in VAT and gradual defunding of TETFUND and NASENI have been jettisoned, the TUC welcomes the inclusion of derivation component in the value-added tax (VAT) distribution amongst the three tiers of government.

It added that when passed into law and implemented, the new derivation formula would encourage productivity at the sub-national level, thereby moving Nigeria gradually away from a rent-seeking economy to a derivation-based system that would stimulate economic activities.

However, the central labour body observed that assigning royalty collection to the Nigeria Revenue Service (NRS) would most likely result in significant revenue losses for the government.

Its words: “Royalty determination and reconciliation require specialised technical expertise in oil and gas operations, which NUPRC possesses but NRS lacks, potentially leading to inaccurate assessments and enforcement issues. Additionally, this shift would create regulatory burdens, increase compliance costs for industry players and reduce investor confidence due to overlapping functions and inefficiencies between NUPRC and NRS.”

It noted that it appreciates the Federal Government for considering its opinion, and urged the government to reconsider its stand on tax collection by a body that may not have the expertise to perform the task creditably.

It added: “TUC has a shared responsibility to promote policies that improve the lives of Nigerians amongst whom are workers. We believe that proactive measures when implemented are for the maximum good of the citizens and are evidence of great and sincere leadership. As the conversations around the Tax Reform Bill continue, we expect that the focus would be equitable economic growth and improved living conditions for all Nigerians.”

The TUC also aligned itself with the position of the governors not to tamper with the present 7.5 per cent Value Added Tax (VAT) saying: “Allowing the Value Added Tax (VAT) rate to remain at 7.5 per cent is in the best interest of the nation, as increasing it would place an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.”

It insisted that at a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses, potentially slowing economic growth and reducing consumer purchasing power.

Sustaining the funding of both TETFund and NASENI will boost the standard of education in the country as doing otherwise will be detrimental to the development of technological advancement of the country.

TUC said: “It is also good to note that both TETFUND and NASENI will remain a going concern, as these institutions have greatly impacted the country through their respective mandates. Both have respectively been instrumental in improving our tertiary education and the adoption of homegrown technologies to enhance national productivity and self-reliance. Their continued existence is vital for sustaining progress in education, technology, and economic development across the country.”