Tax reform bill: TUC seeks N2.5m as threshold for tax exemptions

The Trade Union Congress (TUC) has urged the Federal government to increase the threshold for tax exemptions in the proposed tax reform bill from N800,000 to N2.5 million income earned per annum.

The TUC President, Comrade Festus Osifo, made this known in a statement on Tuesday, January 21, 2025.

Osifo noted that the increment in the threshold would ease the increasing economic burden on Nigerians within the annual income bracket of N800,000.

He added that purposeful leadership must focus on promoting policies that would help in improving the living conditions of citizens, and ensure equitable economic growth.

The TUC President said: “We still have two items that we strongly believe should be reviewed in the tax bills that will immensely benefit Nigerians. The threshold for tax exemptions should be increased from the current N800,000 per annum, as proposed in the bill, to N2,500,000 per annum.

“This will provide relief to struggling Nigerians within that income bracket, easing the excruciating economic challenges they face by increasing their disposable income.

“The proposed bill assigning royalty collection to the Nigeria Revenue Service (NRS) appears beneficial on the surface but would most likely result in significant revenue losses for the government.

“Royalty determination and reconciliation require specialised technical expertise in oil and gas operations, which NUPRC possesses but NRS lacks, potentially leading to inaccurate assessments and enforcement issues.

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“Additionally, this shift would create regulatory burdens, increase compliance costs for industry players, and reduce investor confidence due to overlapping functions and inefficiencies between NUPRC and NRS.

“While we deeply appreciate the Federal Government’s efforts to listen and adjust to our advocacy, we still advocate that the above concerns be considered and adopted in the Tax Reform Bill, they will be highly beneficial to the Government and Nigerian populace.

“The Trade Union Congress of Nigeria has a shared responsibility to promote policies that improve the lives of Nigerians amongst whom are workers.

“We believe that proactive measures when implemented are for the maximum good of the citizens and are evidence of great and sincere leadership. As the conversations around the Tax Reform Bill continue, it is our expectation that the focus would be equitable economic growth and improved living conditions for all Nigerians.”

The TUC boss also commended the federal government for allowing the Value Added Tax (VAT) rate to remain at 7.5% saying: “Increasing it would place an additional financial burden on Nigerians, many of whom are already struggling with economic challenges.

“At a time when inflation, unemployment, and the cost of living are rising, imposing higher taxes would further strain households and businesses, potentially slowing economic growth and reducing consumer purchasing power.”