Increase in VAT Injurious to Economy, Says NLC
Nigeria Labour Congress (NLC) has said that the planned increase in the Value-Added Tax (VAT) by the Federal Government will worsen inflation rate in the economy, which is already unbearable and unsustainable.
NLC President, Adams Oshiomhole in a letter dated October 13, 2005 addressed to the Minister of Finance, Dr. Ngozi Okonjo-Iweala, said Nigerians would be compelled to part with more and more of their disposable income, on which there is already so much pressure stressing that the consequent higher price level would certainly worsen the poverty situation in the country.
“There is no doubt that increasing VAT will also compound the deteriorating investment and productive environment in the country. The cost of doing business in Nigeria remains burdensome, arising from wrong macro-economic fundamentals, part of which is an inflation-inducing energy pricing policy.
The implication is that the Nigerian productive environment is uncompetitive, increasingly characterized by factory closures and mass layoffs of workers.