Nigeria’s influential employers union has warned the Federal Government not to go ahead with a proposal to increase the Value-Added Tax (VAT) charged in the country.
On March 19, the government announced that a new VAT regime might be put in place after the nation’s upper legislative chamber approved a long-awaited new minimum wage of N30, 000.
Speaking at an employers’ forum on Thursday in Ikeja, Mr Timothy Olawale, Director-General of the Nigeria Employers’ Consultative Association (NECA), warned that increasing VAT after approving a new wage would have far-reaching implications for the economy.
Olawale argued that apart from weakening the purchasing power of workers, an increased VAT would impact negatively on manufacturers and businesses, which he said, were currently struggling for capacity utilisation.
“The planned increase will erode the gains of the minimum wage for low-income earners and further weaken their purchasing power, among others.”
He said that…
