The Trade Union Congress of Nigeria (TUC) has urged the federal government to review certain provisions in the proposed tax reform bills to alleviate the economic challenges faced by Nigerians.
TUC President, Festus Osifo, made this appeal in a statement on Tuesday following the organization’s National Executive Council meeting.
Osifo called for an increase in the threshold for tax exemptions, arguing that the current proposal in the bill is insufficient.

“The threshold for tax exemptions should be increased from the current N800,000 per annum, as proposed in the bill, to N2,500,000 per annum.
This will provide relief to struggling Nigerians within that income bracket, easing the excruciating economic challenges by increasing their disposable income,” he stated.
On the proposed assignment of royalty collection to the Nigeria Revenue Service (NRS), Osifo warned that it could lead to significant revenue losses for the government due to the lack of technical expertise in the NRS.
“Royalty determination and reconciliation require specialised technical expertise in oil and gas operations, which the Nigerian Upstream Petroleum Regulatory Commission possesses but NRS lacks,” he explained.
Opposition to VAT Increase
The TUC President also advocated for the retention of the Value Added Tax (VAT) rate at 7.5%, cautioning against any increase.
“Increasing VAT would place an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.
At a time when inflation, unemployment, and the cost of living are rising, higher taxes would further strain households and businesses, potentially slowing economic growth and reducing consumer purchasing power,” Osifo said.
Support for Derivation-Based Tax Distribution
Osifo expressed support for the inclusion of a derivation component in the tax distribution formula among the three tiers of government, describing it as a step toward fostering economic productivity at the sub-national level.
“When passed into law and properly implemented, it will encourage productivity at the sub-national level, moving us gradually from a total rent-seeking economy to a derivation-based system that will stimulate economic activities,” he concluded.
The TUC emphasized the need for a balanced approach in the tax reform process to ensure economic stability and fairness for Nigerians.
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