The Senate has passed the new Minimum Wage bill into law, fixing the sum of N30,000 as the new wage, just as their counterparts in the House of Representatives.
The passage of the new wage is coming on the heels of revelations that the Federal Government might be considering a hike in the Value Added Tax (VAT) by 50 per cent.Itt was learnt that the decision was aimed at enabling the government to generate revenues that would guarantee the payment of the new minimum wage of N30,000.
Two government officials who made the disclosure on Tuesday including the Minister of Budget and National Planning, Senator Udo Udoma, and the Chairman of the Federal Inland Revenue Service, Mr Babatunde Fowler.
They made the disclosure while appearing before the Senate Committee on Finance which is considering the passage of the 2019 – 2021 Medium Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
According to the government officials, the 50 per cent increment in VAT would among other things, enable the Federal Government to fund the new national minimum wage.
In his submission, Fowler specifically said that the proposed payable VAT by Nigerians based on the increment would actually be between 35 per cent (6.75%) and 50 per cent (7.25%).
He said that the goal of FIRS’ was to achieve an N8trn revenue generation target this year adding that the 50 per cent increment in VAT will affect the Company Income Tax and the Petroleum Profit Tax.
He said: “By the end of this year, we should be ready for an increase in the VAT. A lot of Nigerians travel to Ghana and other West African countries and they can see that theirs is much higher. They pay when they go for those trips. We should be ready for an increase on VAT.
“I can certainly see an increase in VAT of at least 35 per cent to 50 per cent this year based on our enforcement activities. There certainly will be an increase in Company Income Tax and also on Petroleum Profit Tax.”
Udo Udoma also submitted to the Committee headed by Senator John Owan-Enoh that the Technical Advisory Committee on the minimum wage, will submit its report to President Muhammadu Buhari this week.
He said: “It will be recalled that as a result of agitations from the unions that the President set up a tripartite committee to look at the Minimum Wage.
“Every five years, it is supposed to be reviewed. It has not been reviewed even though there is no doubt that for both the Federal Government and states; it is a tough time to review wages. But the N18, 000 is really too low and it is difficult for people to live on N18,000.
“I can certainly see an increase in VAT of at least 35 per cent to 50 per cent this year based on our enforcement activities. There certainly will be an increase in Company Income Tax and also on Petroleum Profit Tax.”
Udo Udoma also submitted to the Committee headed by Senator John Owan-Enoh that the Technical Advisory Committee on the minimum wage, will submit its report to President Muhammadu Buhari this week.
He said: “It will be recalled that as a result of agitations from the unions that the President set up a tripartite committee to look at the Minimum Wage.
“Every five years, it is supposed to be reviewed. It has not been reviewed even though there is no doubt that for both the Federal Government and states; it is a tough time to review wages. But the N18, 000 is really too low and it is difficult for people to live on N18,000.
Tibune
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