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High Cost of Living: NLC Asks FG for 50% Workers’ Salary Increase

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By Joseph Amah, Abuja

The Nigerian Labour Congress (NLC) has asked the federal government to increase salaries of workers by 50 percent in view of the high cost of living in the country.
The labour body also advised that the government should raise taxes across the board for the rich and ensure that governors above 50 years resign, to enable it generate money to pay workers. 
The union made the recommendations in a letter signed by its President, Ayuba Wabba, and sent to President Muhammadu Buhari.

 
The letter dated August 8th, was in response to recommendations made by Nigerian governors in July.
 
As part of the recommendations, the governors had asked the FG to raise VAT to 15 percent and offer public workers older than 50 years a one-off retirement package to avert the looming economic crisis.
The governors’ proposals were said to be part of coordinated efforts to instil fiscal discipline and prevent the nation from imminent economic collapse.
 
But NLC said the implementation of the retirement proposal would lead to the sacking of about a quarter of the public sector workforce.
“Pursuant to this, if state governors strongly believe that age 50 is the problem, we demand that all governors, public office holders and politicians above 50, as a mark of good faith, should immediately step aside. Leading by example would spur public servants to take a cue,” the letter reads.
Due to current global realities, the workers’ union asked the federal government to make a 50 percent salary review.
“While we commend you for your thoughtfulness for a wage increase, the truth of the matter is that given the misfortune that has befallen the Nigerian populace, especially workers with fixed incomes, there is an urgent need for a massive intervention much deeper than the 22 percent. We would recommend a 50 per cent salary review across the board given the realities on the ground,” the union said.
Speaking on the governors’ proposal on the increment of value-added tax (VAT) levels to 10 percent with a timeline to further raise it to 15-20 percent and introduction of a flat rate of 3 percent, the union said it would adversely affect the underprivileged.
“These recommendations seek to make the poor pay more taxes while the rich pay little or nothing in clear violation of the well-known norm of the rich paying taxes to cover up for the poor.”
It urged the federal government to “raise taxes across the board for the rich, including increased taxes on luxury goods and lifestyles.”
Speaking on the governors’ suggestion that foreign trips by MDAs, including budgetary-independent agencies, the union said it does not canvass for a total ban.
“Foreign trips ordinarily serve their useful purposes, but they have been abused by MDAs, especially budgetary-independent agencies such as the CBN, FIRS, NPA, MIMASA, NCC, NITDA and other blue-chips. This acts as a big drain on our resources. Accordingly, while we do not canvass for a total ban, there should be some control, a limit to foreign travels. The number should be pegged per year until we have a turn-around,” it added.
The union disagreed with the governors on petrol subsidy removal, saying it “could lead to unintended consequences which we would be better off without”.
“Truth is that the little benefit the average person in Nigeria enjoys could lead to unintended consequences which we would be better off without,” it said.
“The solution to subsidy and the ballooning deficits lies in domestic refining, effective management of our refineries, and creating an enabling environment for effective and efficient public sector leadership in the building and management of local refineries.”
“We do concede that a quick and enforceable resolution of the conflicts around ownership of gas in various entities is key to freeing up investment space for foreign direct investment and local businesses in the country.
“Sadly, prolonged inter-agency fighting has become a familiar feature of your government. You would need to put your foot down pending the paperwork.”
It, however, supported the governors for quick implementation of the updated Stephen Oronsaye Report.
The union also supported the governors’ suggestion for the centralisation of the collection of all federal oil and non-oil taxes in one agency.

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 Bill to Amend CBN Act goes for 2nd Reading in Senate

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The Senate on Tuesday at plenary, passed for second reading, a bill to amend the Central Bank of Nigeria (CBN) Act.

Leading debate on the general principles of the bill, its sponsor, Sen. Sadiq Umar (APC-Kwara), said the bill was to enable the appointment of a person other than the Governor as Chairman of the Board of CBN.

He said the bill was also designed to divest the powers of the board on determining and fixing salaries and allowances of its members.

According to him, the bill if passed, will be used to determine consideration and approval of the annual budget of the CBN.

Suleiman said the envisaged new chairman of the proposed board of the CBN, would have powers to determine salaries and allowances of members, while the Governor focused on administrative duties of the bank.

In her contribution, Sen. Betty Apiafi (PDP-Rivers), called for a holistic amendment of the CBN Act, adding that the CBN governor went out of his way to indicate interest to participate in politics while in office.

She said the development was not the trend in the world, given that election materials were kept in CBN.

Senators Enyinnaya Abaribe (APGA- Abia), James Manager (PDP-Delta), Orji-Kalu (APC-Abia) kicked against the hasty amendments to the bill, while Sen. Barau Jubril (APC-Kano), supported the bill in his submission.

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President of Senate, Ahmad Lawan, however, cautioned senators to focus on the proposed amendment rather than deliberating on alleged attempt by the CBN governor to contest as that wasn’t part of the general principles of the bill.

Lawan, thereafter, put the passing of the bill for second reading to a voice vote and senators voted unanimously for its passage.(NAN)

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Economy

FG to Deploy PPP Solution to Boost Excise, Tax Revenue

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The Federal Government says it is set to deploy an Integrated Secure Track and Trace Solution to boost revenue earnings through excise and tax collection.

The Director-General, Infrastructure Concession Regulatory Commission (ICRC), Michael Ohiani, said this while presenting the Outline Business Case (OBC) Compliance Certificate to the Minister of Finance, Budget and National Planning, Zainab Ahmed.

A statement issued by Ms Manji Yarling, the Acting Head Media and Publicity, ICRC in Abuja on Tuesday, said the project was aimed at mitigating the country’s dwindling revenue and foster more non-oil revenue streams.

“The PPP solution will adopt the Build, Operate, and Transfer option.

“It will allow the Federal Government, through the Ministry of Finance, to establish an effective and non-intrusive control on a broad range of goods and services subject to excise duty, safety, and standards,” Yarlling said.

While receiving the OBC certificate, the minister said the proposed solution was important at this time, as the government was currently constrained in terms of revenue and required an urgent boost.

According to Ahmed, the purpose of the project is to enable the ministry to have visibility over some key products that are made in Nigeria, in terms of the quantity and companies that produce them.

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“It is also to differentiate between the same products produced in Nigeria and the ones that are imported, the bottom line is for us to be able to maximise our revenue potential.

“Having had several meetings with the proposing company, we thought that the best way to do this is through a PPP model and I am glad that the OBC Compliance Certificate has been issued,” the minister said.

Ahmed said that as the fiscal authority of the government, the ministry of Finance had the responsibility to ensure that duties and taxes were paid.

She said the ministry’s responsibility was also to assist relevant agencies to make their work more seamless, hence the need to deploy the solution.

The minister promised that the solution was not going to put more burden on companies, as the duties to be collected were not going to disrupt manufacturing in any way.

“I am assuring that the manufacturing companies’ businesses will not be disrupted, they are not going to incur any additional cost, the excise duty that will be charged will be a pass-through cost.

‘We are convinced that this is the right thing to do,” she said.

Ahmed expressed confidence in the solution citing that the same infrastructure had been deployed by the same company in South Africa and Morocco to boost their revenue accruals.

Ohiani while presenting the OBC, said that the solution would bring about many benefits to Nigeria including stemming illicit trade and revenue leakages; and improving revenue generation for government.

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Other benefits he said include ensuring the circulation of high-quality goods and services; achieving economies of scale and synergies among ministry’s agencies; enhancing technology and knowledge transfer and generating employment opportunities.

“The proposed solution when implemented will allow the Federal Government of Nigeria to establish effective and non-intrusive controls on a broad range of markets.

“Markets such as goods and services subject to excise duty, and goods subject to conformity with health, safety, and quality standards.

“Additionally, the solution aims to reduce the levels of counterfeiting, sub-standard quality, tax evasion, and under-declaration in these markets,” Ohiani said.

He pointed out that the ICRC and the ministry would now proceed to the procurement stage.

“A Full Business Case (FBC) Compliance Certificate would be issued for onward submission to the Federal Executive Council (FEC) for project approval,) (NAN)

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Business News

Good Tax Revenues ‘ll Enhance  Compliance – FIRS

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By Tony Obiechina, Abuja 

When governments deploy tax revenues for the common good of the citizens, there is a concomitant increase in tax compliance by citizens who see the direct benefit of the taxes they pay.

This was the position held by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami during his opening remarks at the launch of the Public Finance Database by the Nigeria Governors’ Forum at the Wells Carlton Hotel, in Abuja, on Tuesday, last week.

Mr.

Nami argued that the low compliance tax rate in most developing countries was as a result of the failure of the social contract between the taxpayers and the government, noting that those in political leadership in the country had a duty to promote a tax-paying culture by relating projects and infrastructural developments executed by them to taxes paid by taxpayers.

“Taxpayers need to see what has been done with their money to be encouraged to continue to pay their obligations under the Social Contract they have with the government.

“I am delighted that one of the sessions focuses on the tax-for-service programmes as they impact tax revenues. This issue is dear to us as tax administrators as there is a nexus between the effective utilization of tax revenue and tax compliance,” he stated.

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“The low level of tax compliance in developing countries can be attributed to the failure of the social contract between the taxpayers and the government. It is expected that if the citizens are committed to paying taxes, the government should be committed to using the taxes for the common good of all citizens.”

The FIRS boss further argued that projects funded by taxpayers’ moneys should be reported as such and not personalized so that citizens would begin to relate these projects as the proceeds of their taxes.

“Those in political leadership should promote the tax-paying culture by relating projects and infrastructural developments executed by them to tax.

“The government at all levels are doing a lot with taxpayers’ money but citizens do not easily appreciate these facts because of the way and manner the projects are reported.

“There is the need to de-emphasize and de-personalize projects so that the citizens will begin to relate all the ongoing laudable projects in the states to tax revenue. This singular act to a great extent will increase the tax morale and enhance compliance.”

Mr. Muhammad Nami, an advocate for a harmonized tax system as a cure for tax revenue leakages used the platform to call for the country to make a bold paradigm shift  by harmonizing the country’s tax system to optimize tax revenue collection.

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“Recently, there has been a clamour for a holistic review of our tax system. Its proponents, including myself argue that if Nigeria must achieve its tax revenue potentials as the fulcrum of economic development, a harmonisation of our tax system must be undertaken.

“Tax harmonisation for enhanced revenue generation, which was the theme of the 2nd National Tax Dialogue was carefully chosen to reiterate the need for us as a nation to rethink the current tax system being operated.

“There was a consensus at the dialogue that Nigeria needs a transition to a unified tax administration as practised globally by most of the efficient and effective tax jurisdictions that have achieved optimum tax revenue collection. 

“Certainly, there is no gainsaying that if Nigeria must be less dependent on external borrowing and buffer from the volatility and dwindling oil revenue, there should be a paradigm shift. Beyond politics and sentiment, the country should be willing to make those bold and hard but beneficial tax reforms and there is no better time than now, if we must avert the looming debt crisis. The gains from a harmonised tax system far outweigh the fears expressed in some quarters, if dispassionately analysed.”

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