Minimum wage: FG may be forced to increase tax, says Udoma

The approval of the new minimum wage by both chambers of the National Assembly might have stirred a new controversy as the possibility of increase in Value Added Tax (VAT) looms.

Recall that the senate on Tuesday approved N30, 000 as the new minimum wage with the passing of the new national minimum wage bill.

The upper legislative chamber passed the bill after adopting the report of its ad hoc committee on the national minimum wage at plenary on Tuesday.

President Muhammadu Buhari sent the wage bill for consideration after the national council of state approved it.

The council had approved N27, 000 while the federal government said it would increase it to N30, 000 for its workers.

But while appearing before the Senate Committee on Finance, Minister of Budget and National Planning, Senator Udo Udoma, noted that the Federal Government might be forced to consider an upward review of the Value Added Tax to garner enough fund to finance the approved new minimum wage.

Udoma who complained about the current N18, 000 minimum wage told the panel headed by Senator John Owan-Enoh that the Technical Advisory Committee on the minimum wage will submit its report to President Muhammadu Buhari this week.

He said, “The current minimum wage of N18, 000 is really too low. It is difficult for workers to manage on that amount.

“The President supported a review, but it is important that as we are revising it, we should be able to fund it.

“It is in the light of this that we would be coming to you (Senate) because there may be the need to make some changes, especially the VAT, in order to fund the minimum wage once it is announced”, he said.