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Planned increase in VAT anti-people, anti-development – Labour

…Says it’ll weaken purchasing power, worsen poverty level

By Victor Young

Organised Labour has on Friday rejected government planned increase in Value Added Tax, VAT, from 5 % to 7.2 %, describing the planned increase as anti-people and anti-development.

Labour, Day
Labour

Speaking through the Union Labour Congress of Nigeria, ULC, Labour asked government to jettison the plan as it would not only weaken the citizens purchasing power, but also would worsen the poverty  level in the country.

ULC in a statement by its President, Mr.Joe Ajaero, argued that manufacturers and businesses in attempt to recoup the extra cost as a result of the hike in VAT would dump it on the consumers and this would snowball into another round of increasing prices triggering another inflationary round that would ultimately undermine the economy.

The statement reads in part:  “We are indeed worried that governance in Nigeria has rather become a tool for impoverishing the people rather than to make the lives and living of the populace more beneficial. The purpose of government we have always known is anchored on the drive to provide policies and programmes that are centred on the promotion of the welfare of the citizenry but one wonders why we have seen a continuous reversal of this fundamental pursuit of governance in Nigeria now and in the past

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“ULC views this proposed hike as one of those actions of government that are not founded on making positive impacts on the lives of the masses of Nigeria. The consequences of this hike on the lives of Nigerians that are already suffering horrendous deprivations as a result of ill-thought out programmes of various governments is dire and is capable of exacerbating the poverty that has ravaged the peoples of our nation. We do not think that government realises the depth of misery that pervades our nation and may have completely detached itself from the people it ought to succour.

“Definitely, prices of goods and services will go up as a consequence with its attendant implications for cost of living pushing down further greater number of Nigerians into the cesspool of poverty. Manufacturers and businesses in attempt to recoup the extra cost as a result of the hike in VAT would dump it on the consumers and this would snowball into another round of increasing prices triggering another inflationary round that would ultimately undermine the economy.

“We do not understand why a nation that is already suffering huge effective demand gaps because of the prevailing low purchasing power of the citizenry would consider increasing consumption tax on the already depressed consumers? Why would the government be enamoured by the pursuit of increasing revenue to the detriment of the wellbeing of its own citizens? Or, what exactly is the policy objective – to emasculate the people more?

“ULC is worried that a government that has put all manners of challenges on the path to paying the new minimum wage of N30,000 to Nigerian workers would find it so easy to foist further hardship on the same workers and peoples. This proposal cannot find any reasonable explanation as it cannot be anchored on any plausible economic objectives. We had felt that the people are taxed more when the government has created the ambience for continuous wealth creation within the nation. It is the wealth created that is taxed but in this case we strongly believe that the government is trying to wring out of poor Nigerians that it has refused to govern effectively more blood from their already anaemic bodies. Is it not possible that government may just be putting the cart before the horse? You sow then you reap! It is not the other way round. If that is the case, we believe it will be counter-productive.

“Congress therefore calls upon the federal government to have an immediate rethink and do away with this proposal as it is very wrong headed. It is not just anti-people but also runs against the nation’s developmental objectives. The National Assembly must use this opportunity to show leadership. It must reclaim its lost connection with the Nigerian people by rejecting this proposal. It must insist that the government must use the resources already available within the nation more effectively and efficiently by cutting down on the cost of governance. Foisting more hardship on the people at this time is not an acceptable idea in governance which ought to be a tool to lift burdens from the shoulders of the citizenry.

“We demand that government shows us what it has done with the revenue it received from the petroleum product price hike and the various Billions of Naira it has realised through stamp duties and other charges it has levied on hapless citizens these past years. The returned Abacha loot which has remained largely unaccounted for must be shown to have been utilised for Nigerians. All the recovered loots and the huge revenue FIRS has reported ought to plug whatever fiscal holes that may have emerged albeit because of less than careful handling of our nation’s coffers by unconscionable politicians. The continuous use of the levers of power to force the masses to surrender part of their income to the ruling elite to continue swimming in opulence is the height of extortion and cannot be accepted by patriots.

“It is truly unfortunate that this government by this very insensitive action may be further estranging itself from the people. Nigerians are being consistently pushed to the walls and the consequences may not be predictable by anybody. Our people are becoming more despondent by the day and are having an increasing sense of foreboding and alienation. This may spell difficulties for our dear nation and should be avoided. The increasing spate of kidnappings all over the nation, the Boko Haram insurgents and general insecurity all over our nation are all bye-products of the continued alienation of the citizenry from the socio-economic space by either policies or actions of the nation’s ruling elite.

“Governance we insist cannot be about more money for government but must be about more benefits for the citizenry and governance effectiveness; how policies and actions make the lives of the citizens better. It is clear that the government seems to have lost focus on its major score. We are then forced to ask government whether it still thinks about Nigerians. We must find out whether our welfare as a people drives their programmes and actions? If this disillusionment continues, we are afraid for our nation.

“ULC feels that it is important that Government must return the people as the centre of its governance efforts. It can only do this if it purges itself of the urge to wring more money out of the already impoverished people of Nigeria no matter the pressure. This hike in VAT at this time is totally unacceptable. Nigerian workers cannot afford it! Nigerian masses cannot afford it!! Nigeria as a nation cannot afford it!! Let us step it down.”

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