…Faults Moves To Assign Royalty Collection To Nigeria Revenue Service
The President of the Trade Union Congress (TUC), Festus Osifo, has called for an increase in the tax exemption threshold from ₦800,000 to ₦2.5m per annum, stating that the current proposal of N800,000 in the Tax Reform Bills was inadequate.
He argued that this adjustment would provide much-needed relief to struggling Nigerians in that income bracket by increasing their disposable income and alleviating economic challenges.
Speaking on Tuesday in Abuja, Osifo acknowledged that the tax reform bills contain significant reforms, though he described some sections as unfavorable.
He referred to the press briefing of the Congress National Executive Council (NEC) meeting held on November 26, 2024, where four contentious areas were outlined.
These include “The increment in Value Added Tax from the current 7.5 per cent to 10 per cent , 12.5 per cent and finally to 15 per cent; tax exemptions limited to those earning N800,000 per annum; the gradual defunding of TETFUND and NASENI; Nigeria Revenue Services (NRS) taking over the role of NUPRC in the collection of royalties in the oil and gas industry”.
Osifo expressed relief that an agreement between state governors and federal government representatives addressed concerns about VAT and the defunding of TETFUND and NASENI.
He stated that maintaining the VAT rate at 7.5 per cent serves the nation’s best interests, as higher rates would burden Nigerians already struggling with inflation, unemployment, and rising living costs.
“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,” Osifo said.
He praised the decision to retain TETFUND and NASENI, emphasizing their critical roles in improving tertiary education and fostering homegrown technologies to boost productivity and self-reliance.
“Their continued existence is vital for sustaining progress in education, technology, and economic development across the country,” he noted.
However, Osifo criticized the proposed ₦800,000 tax exemption threshold, insisting it would lead to revenue losses and immense hardship for vulnerable workers.
“The threshold for tax exemptions should be increased from the current ₦800,000 per annum to ₦2.5m per annum. This will provide relief to struggling Nigerians within that income bracket, easing the excruciating economic challenges they face by increasing their disposable income,” he said.
Osifo also opposed the proposed transfer of royalty collection from the NUPRC to the NRS.
He explained that the NUPRC’s specialized technical expertise in oil and gas operations ensures accurate royalty assessments and reconciliations, which the NRS lacks.
“This shift would create regulatory burdens, increase compliance costs for industry players, and reduce investor confidence due to overlapping functions and inefficiencies,” he warned.
Osifo welcomed the inclusion of a derivation component in VAT distribution among the three tiers of government.
He said, “When passed into law and properly implemented, it will encourage productivity at the sub-national level and gradually shift us from a rent-seeking economy to a derivation-based system that stimulates economic activities.”
He urged the federal government to address the TUC’s concerns by adopting its recommendations in the Tax Reform Bill.
The bill includes the Nigeria Tax Bill (NTB), Nigeria Tax Administration Bill (NTAB), Nigeria Revenue Service Establishment Bill (NRSEB), and the Joint Revenue Board Establishment Bill (JRBEB).
These reforms are expected to address inefficiencies, broaden the tax base, increase government revenue, and stimulate economic growth.
Tax Reform Bills: Raise Threshold For Tax Exemption From ₦800,000 To N2.5m, TUC Tells FG is first published on The Whistler Newspaper
Source: The Whistler
