Should government increase value added tax to pay N30, 000 minimum wage?

Olatunde Olabanji

My response to this question puts my thoughts into a dilemma. With every sense of consideration and fairness to all party, if the government should increase VAT as pronounced at a level of 35 percent from 5 percent just to pay a minimum wage of N30, 000, I must say it’s not realistic and it’s not a good step. Let’s take a general assumption that the government eventually stake on this rule, imagine the rate of inflation on every commodity you are buying into your household. All these inflations, will generally affect the lives of the masses negatively. In my view, I think this N30, 000 minimum wages is realistic but if it cannot be achieved, there is a need for the labour union and the Federal Government to dialogue and put all the necessary factors into consideration before acting on this step. I think an additional increase would ultimately substitute effectiveness on government part on infrastructural development and the overall effect would affect consumption rate on all items as well as hurt the poor. If the re-election gift from the government to the citizens is to increase VAT, National Housing Fund (NHF) and Company Income Tax (CIT) so as to make life difficult in all aspect, then it is not worth it. I remember in 2014, we received a tremendous fuel increment of N145, high foreign exchange and high price of commodity. Let us not forget that in most cases where VAT has been increased in other countries, it has a recurring effect. I believe the Federal government should look into other measures to strategically complement this increment to work out without increasing the VAT, else they will be looking to that point of making life very difficult for Nigerians.

Dele Olaleye

Dele Olaleye
Ibadan

By increasing VAT it would decline the purchasing power of individuals even if they earn more. What the government needs to do is to create a price stability policy and work towards creating a better standard of living which is one of the objectives of Macroeconomics policy to regulate the economy. Increasing VAT and minimum wage will only trigger inflation.

 

 

 

 

 

 

Austine Okon

Austine Okon
Lagos

I do not support the increase in VAT from 5 percent to any percentage. It is like robbing off Peter to pay Paul. Our government is already over burdening the workers with all kinds of taxes yet nothing to show for it. If they cannot pay the so called minimum wage, then it should be suspended rather than suffer the masses all in the name of increasing minimum wage.

 

 

 

 

 

 

Kehinde Akinlade

Kehinde Akinlade
Lagos

No. This is because everyone is going to be affected especially the masses. The VAT would cause increments in goods and services when the minimum wage is still not enough compared with the present situation. Increment in VAT rate is highly insensitive and shouldn’t be passed instead the cost of governing should be reviewed. I believe this is more or less a criminal act. If this is the Next Level this government is bringing us to, then I will never subscribe to this.

 

 

 

 

 

Mariam Ali

Mariam Ali
Kaduna

If the government decide to increase value added tax in other to pay N30,000 minimum wage, it will still not be in favour of the masses because increase in VAT from 5 percent  to 50 percent means the masses will be paying N15,000 out of the N30,000 minimum wage for the goods they consumed. So what then is the essence of government increasing the minimum wage? My own opinion is that government should not even think of increasing VAT to 15 percent. It is best they leave it at the 5 percent if they really have the interest of the masses as they claim.

 

 

 

 

 

Gbenga Oyebamiji

Gbenga Oyebamiji
Ibadan

My heart bleeds for my country. Imagine! What percentage of Nigerian workforce does government engage? You will agree with me that it is slim compare to other workforce. Increasing VAT implies that non-government workers will pay for minimum wage increase even while the increase did not extend to them.  The increment will have terrible and disastrous impact on our economy because inflation is imminent, many foreign investors would be forced to leave our country.

 

 

 

Raji Taofeek Abiola

Raji Taofeek Abiola
Ado-Ekiti

I have seen this coming but I didn’t expect the decision to be so soon. I know the increment in minimum wage will surely lead to money illusion whereby people will think they are earning more whereas they aren’t because the higher their income, the higher the prices of goods and services. Now that the government has decided to increase the percentage of VAT, it will definitely lead to increase in prices of goods consumed which makes no sense at all because it has not change anything the masses have been yearning for. We have been yearning for equitable distribution of income but I can’t see that possible in this country due to the kind of leaders we have because they care more about themselves than the masses. I believe it’s only the elites that can benefit from the policy and not the masses. I urge the government not to increase VAT.

Jeremiah Omodoyin

Jeremiah Omodoyin
Delta

If the VAT is increased, it will affect us the masses. I feel the government should not have increased the minimum wage. The government does not have to get anything in return for helping her citizens.

 

 

 

 

 

 

 

 

Musa Yusuf

Musa Yusuf
Lagos

No because that will be unfair to us the citizens. How much is the minimum wage that the government have decided to increase the VAT? The masses are suffering and the economic situation is making matters worse for every one of us. What happened to all the VAT that has since been collected and yet nothing to show for it. The so called increment in minimum wage is not enough with all the responsibility one is faced with and yet the government is adding more injury to one’s problem, I will urge the government to help the citizens if they want to and if not leave the minimum wage the way it was without increment. Increase in VAT will cause hike in the cost of things.

 

 

 

 

Kingsley Ikobia

Kingsley Ikobia
Ajegunle

I call it madness and it shows that we have no government. Must the government suffer the masses to pay minimum wage? This is unacceptable. I believe in other countries it is the other way round and now I know the reason why other countries make jest of us. Is it a must the government increase the minimum wage because it is written in the constitution that minimum wage must be increased every five years? I know increase in VAT is not written in the constitution, so calling for an increase in VAT is unconstitutional.

 

 

 

 

 

Ambali Ayinla

Ambali Ayinla
Lagos

The proposed VAT hike is not fair because the wages and salaries in Nigeria are not reasonable to keep decent living. In a situation where social services are not working, life and living conditions will get worse and poverty will increase, I believe the government can mobilize resources by cutting the cost of governance, minimizing waste and blocking stealing.

 

 

 

 

 

 

Darlington Eromosele

Darlington Eromosele
Edo

Yes I am in support of it and is a welcome development. My reason is that, let us bring in the economic principles, the more the demand, the higher the price and also people will want to bring more goods to the market. I know the increase in minimum wage will be of a great relief and let us not forget that VAT also adds to the revenue of what the country gets and that is what is used for improving our infrastructures, social amenities and so on. For the government to be consistent with the increment, government have to increase the cost of goods she sells to the laborers. I know the labour union asked for the increment in wages and overlooking the value of the naira, they failed to consider if the value of the money will buy enough or not. I expected them to have asked that government improve on the value of the naira so that even if they earn N10, 000, it will be enough to buy more than one needs. I want people to know that money is made of paper and it is the value one gives to it that makes one get things in quantity. Also, if citizens keep asking for increment on their wages without considering what they can get from it, that means they will get lesser because government will not want to give so much and she is having less.

Elijah Dele

Elijah Dele
Lagos

It is a no for me because it will further make doing business in Nigeria harsher and also increase cost of production and services. What I feel is that it should not be increased, rather the government need to be more efficient in the collection. The economy is still fragile, so government cannot resort to increase to support the budget. The problem is that the middle class is non-existent and only a fraction of the elite are paying tax. So an increase will affect the poor and make them poorer. The economy today is not in the position to create jobs. The government does not have the revenue to build a larger budget, we must put the enabling laws in place to enable the private sector pilot infrastructure development.

 

 

 

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