By Johnbosco Agbakwuru
ABUJA — THE Non-Academic Staff Union of Educational and Associated Institutions, NASU, has lamented that the Federal and State governments impose excessive and multiple taxes on workers without being sensitive to their plights.
NASU alleged that workers especially the low-income earners bear the brunt of government excessive and multiple taxations, while big companies are granted waivers.
It also said that the desire of the state and federal governments to help the economy through imposition of excessive and multiple taxations was causing unbearable hardship among its members as a result of inadequate incomes, high prices, homelessness, poverty and loss of purchasing power.
The union in a statement issued by its General Secretary, Comrade Peters Adeyemi on Sunday urged governments at all levels to introduce tax ceilings to low-income workers to protect them from excessive and multiple taxes.
Comrade Adeyemi said there should be a poverty line where anybody earning below the poverty line should not pay income tax.
The taxes he said include income tax, value-added tax, bank charges tax, communications tax as well as the National Housing Fund.
According to him, “On several occasions, we have had cause to talk to the Governments about the negative effect of these taxes and their excessive nature on our members’ welfare.
“We regard the National Housing Fund as another form of tax imposed by the Federal Government on her employees. Under the extant National Housing Fund (NHF) Law (NHF 1992), every Nigerian earning N3,000 or more per annum is required to contribute 2.5 percent of their monthly basic salary to the NHF.
“The funds mobilised will be made available to contributors at affordable interest rates to build their home. The Fund, which is mandatory for all Federal public servants, commenced in 1992 with the money deducted from source.
“On the enactment of the law, the Fund was based on basic salaries. However, with the consolidation of salaries, the deductions are now based on consolidated salaries.
“Unfortunately, not up to 10 percent of Federal public servants have been able to access the Fund. This situation has caused NASU members to rename the Fund as “National Housing Fraud”.
This is an unprogressive tax that is unprofitable to the contributors and the nation therefore, it has to be stopped.
“In Nigeria, only workers pay taxes. Big businesses get tax exemptions and tax holidays. No matter who Governments actually bill for tax, workers end up actually footing the bill for each and every other tax levied in this country.
“When a business must pay tax, it cannot pay it out of profits. It raises the prices of the products it sells and for manufacturing companies, they will be tempted to reduce the quality of the product all in order to reduce the effect of the tax on the profit of the company (shareholders money).
“In either case, the worker ends up paying the company tax. The first is that the worker pays the cost of the tax when he pays for the product at a higher price, the tax having been factored into the price of the good.”
Adeyemi also said that workers again pay the cost of the tax when they have to replace the product more frequently, because of the inferior nature as it either breaks down or wears out frequently.
He said,” Another tax that workers pay is property tax. In most, if not all Tenancy Agreements, there is always a covenant on payment of taxes. This covenant is captured as follows: To pay all bills, taxes, rates, duties, assessment, impositions and outgoings payable subsequently, when introduced in respect of the premises together with other tenants on pro-rata basis.
“Even where this is not expressly stated and effected in the manner above when the landlord pays property tax, the worker pays the cost of the tax when he pays rent at a higher price, the taxes having been factored into the rents.
“Workers who have entered into Tenancy Agreements, written or unwritten and are not able to meet this obligations are evicted from the houses and made homeless.
“Top business executives and their class partners in the public service bureaucracy, either live in houses owned by or rented for them by their organisations.
“In order to meet previous agreements such as rents, school fees and those that are incidental in nature like unforeseen medical bills, workers are left with no other option than to resort to obtaining loans from lenders especially banks with the resultant high-interest rates.
“Those in the top echelon of businesses, or their class collaborators in the political class as well as public service bureaucrats, seldom go for loans, as their allowances are adequate enough to take care of their incidentals.
“Provisions are also made in their Conditions of Service for medical treatment in highbrow medical institutions within and outside the country.
“It is only workers in low-income brackets that pay the recently introduced communications tax. Wealthy businessmen, their top echelon employees, their class collaborators in the political class as well as public service bureaucrats, do not pay communications tax.
“Their calls are paid for by big businesses and Governments. This is done either by providing them with business lines, which are postpaid by the organisations or their calls are subsidised through call allowances.
“When it is all added up, it is only NASU members and other workers as well as the downtrodden masses of this country that pay taxes. These burden of excessive and multiple taxation has impoverished the average worker in Nigeria.
“The salaries and wages paid to them can no longer be regarded as living wage as they have become slave wages, forcing our members to live below internationally declared poverty line.”
NASU said the situation is compounded by the absence of any social security safety net in the country and the fact that members of the union are not counted among the 10,695,360 individual households the Federal Government declared as poor households in Nigeria as at 29th February 2020, which disqualified them from the conditional cash transfers of the Federal Government.
“The reason is that our poverty-ridden members are erroneously termed to be gainfully employed,” it said.
It further said that “The desire of Governments at the States and Federal levels to help the economy through imposition of excessive and multiple taxations is causing unbearable hardship among our members as a result of inadequate incomes, high prices, homelessness, poverty and loss of purchasing power.
“We, therefore, declare that it is time to end these excessive and multiple taxations in Nigeria. We call for the placing of tax ceilings for lower-income workers; there must be put in place a poverty line and anybody earning below the poverty line should not pay income tax.
“We call for the abrogation of the National Housing Fund Law and the stoppage of further deductions in the name of the Fund from the salaries of our members because the Fund has failed to achieve its objectives.”