Minimum wage: VAT raise should be discussed – Labour union declares

Joe Ajaero, the president of United Labour Congress (ULC) said on Wednesday, March 20, that any increase in the Value Added Tax (VAT) that would be used to pay the N30,000 new minimum wage would not be accepted.

 Ajaero spoke to the News Agency of Nigeria (NAN) in Lagos in reaction to federal government’s indication that it might increase VAT to enable it pay the minimum wage.

The National Assembly had on Tuesday, March 19, passed N30, 000 as the new minimum wage for workers; two months after the House of Representatives also approved the same.

The minister of budget and planning, Senator Udo Udoma, had at a meeting in Abuja said that VAT could be raised to 50% before the end of 2019 to enable the government fund the new wage.

 Legit.ng gathers that VAT is currently being charged at 5% The ULC president said that there was no condition attached to the increase in salaries for workers during the tripartite negotiation. He said that if the government was contemplating increase in VAT to fund the new minimum wage, it should be discussed with stakeholders.

He said: “There was no condition attached during minimum wage negotiation. If there will be increase in VAT, all stakeholders will look at it and take a decision.” 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.

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

 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 industrial crisis.