Labour unions split over VAT increase for minimum wage

The President of the United Labour Congress (ULC) says organised labour would not accept government’s plan to increase the Value Added Tax (VAT) to pay the N30,000 new minimum wage.

Its counterpart, the Trade Union Congress, however , commended the Senate for passing it to law.

ULC’s Joe Ajaero spoke on Wednesday  in Lagos in reaction to the Federal Government’s indication that it might increase VAT to enable it to pay the minimum wage.

The National Assembly on Tuesday passed N30, 000 as the new minimum wage for workers; two months after the House of Representatives first approved the same.

The Minister of Budget and Planning, Udo Udoma, at a meeting in Abuja, said that VAT could be raised to 50 per cent before the end of 2019 to enable the government fund the new wage.

The VAT is currently being charged at five per cent.

But the ULC president said there was no condition attached to the increase in salaries for workers during the tripartite negotiation.

He commended the Senate for quick approval but said that President Muhammadu Buhari should not delay in signing the bill for it to be implemented.

Meanwhile, the Trade Union Congress of Nigeria (TUC) had commended the Senate for endorsing the N30, 000 monthly National Minimum Wage as recommended by the Tripartite Committee.

TUC President, Bobboi Kaigama, in a statement, said the new wage would in no small measure give the workers a sense of belonging.

Mr Kaigama said it was regrettable that inflation has affected the purchasing power of the new wage, as prices of commodities had risen even when employers have not commenced payment.

He urged the 9th Assembly to prevail on governors to pay workers their salaries and pension as and when due to avoid an industrial crisis.