Don’t tax minimum wage, NLC tells FG

The Nigeria Labour Congress (NLC) has demanded amendment to tax laws to exempt income below N30,000 from being taxed.

It also said the yet- to- be implemented national minimum wage should not be taxed.

This is one of the motions adopted by the 12 National Delegates Conference of the Nigeria Labour Congress in Abuja.

In a motion submitted by the National Union of Textile Garment and Tailoring Workers of Nigeria at the plenary session of conference, the union argued there was ‘twin assault on the real income of Nigerian workers caused by unrestrained devaluation of the naira and high rate of inflation’.

It also expressed concerns the process for the new minimum wage was taking too long, calling on the parent body, NLC, to discuss strategies and plans for effective implementation of the new minimum wage particularly at the state level.

General Secretary of the union, Comrade Issa Aremu, said it was important to put pressure on the Federal Inland Revenue Service to raise the tax bar so that the N30,000 minimum wage would fall below taxable income, while also calling for tax holidays for some categories of Nigerian workers.

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He said, “Now that we have raised the minimum wage to N30,000, we must impress it on the FIRS to raise tax bar so that the new minimum wage will be protected. If you tax minimum wage of N30,000, we may as well go back to N25,000 or N27,000 by default. The Deputy Speaker of the House of Representatives raised the point and I think labour must push the agenda to protect the new minimum wage.

“The N30, 000 is actually a compromised amount from N56,000 earlier proposed so it must be protected. If the Federal Government can give 10 year tax holiday to companies, why not give the same to workers? Given the collapse of income, today, Nigerian workers deserve tax holidays.

“We are not asking for this because we consider our job as charitable, what workers have in their pocket is what will turn the economy around. That is what we will use to purchase goods in the market and pay rent. For economic recovery, it is good for workers to have sustainable purchasing power or disposable income that is off the tax hook.”

General Secretary of the NLC, Peter Ozo-Eson, who appeal for protection of the new minimum wage, said that the income tax law needed to be amended to protect workers purchasing power.

Ozo-Eson said, “Given that the N30,000 we agreed as a compromised minimum wage is so low, ideally, it should not be taxed but I believe that the correct way to do it is to amend the income tax law in order to raise the exemption bar if the N30,000 will fall within.

“The law should be amended to ensure that the minimum wage level is below the taxable income. Under the present law, if you earn N18, 000 a month, your tax is zero.

“There is a tax table but with N30,000, under the existing exemption guideline, there will be some little tax because it will be slightly above the exemption tax.

“What needs to be done is to have an adjustment to the schedule so that the exemption is placed above the minimum wage.”