Our Reporter
National Union of Chemical Footwear, Rubber, Leather and Non-Metallic Products Employees, NUCFRLANMPE, has rejected the Federal Government’s proposed Value Added Tax (VAT) increase from five per cent to 7.2 per cent.
Speaking with reporters in Lagos, the National President of the union, Comrade Goke Olatunji, said border closure is already taking its toll on the sector, adding that the increase in VAT will add to the various challenges facing their members.
In addition, he said the increase would erode any benefit the increase in the new national minimum wage would bring to workers and Nigerians
According to him, government should widen the tax net and get people to pay tax, rather than over-tax those that are in the net already.
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He said: “We reject the increase as it will further lead to our burden. At the moment, many of our members are finding it hard to survive as a result of the closure of the border. Many of our members cannot export their goods to the neighbouring companies.
“Not only this, it will also erode whatever purchasing power the minimum wage may bring. We see it as a move not well thought through with the welfare of Nigerian wage earners in mind.
“Its impact on Nigerian manufacturers and job creation and retention will be nightmarish. It is clearly insensitive to the plight of the ordinary Nigerian. What the government needs to do is to widen the tax net and get people to pay tax and not to overtax those that are in the net as of now.”
Olatunji said this will also erode the gain which is supposed to arise as a timely passage of the 2020 budget.
He said: “Yes, it is a good thing that the 2020 budget passed but I don’t see the budget making much impact next year, despite the timely passage.
“This is because the challenges facing us is enormous. One of the problems we face in our sector is erratic power supply and our employers like other employers in the country, are not finding it funny because they spend so much on alternative sources of power especially generators and diesel for most of their operations which has eaten deep into their profits.
If you recall, Dunlop and Michelin were major companies in our sector, but they left this country because of harsh operating environment, mainly the issue of power, and threw all their workers into the unemployment market. Today, their products are everywhere in the nation’s market.
“However, we are not sitting idle, we are already diversifying to boost our revenue base.”
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