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25 March 2019
The Socialist Party of Nigeria (SPN) strongly condemns the reported planned increase in Value Added Tax (VAT) by the Buhari/APC federal government. According to news reports credited to government officials, the government wants to increase VAT from the current 5 percent to around 7.5 percent. This increment, if allowed to scale through, will further worsen already high cost of living and make life more unbearable for vast majority of the working people and the masses. For a government that has superintended over growing unemployment, deepening poverty and costlier social services, again increasing VAT, a major determinant of inflation, shows how insensitive the Buhari/APC government is.
The argument of the government that it needs to increase VAT in order to fund the new minimum wage is both illogical and blackmailing. Illogical because one of the reasons necessitating a new minimum wage is the rising inflation, which has made nonsense of the existing N18,000 minimum wage. Increasing VAT will worsen the inflation rate, therefore it is tantamount to government taking with the left hand what was given with right hand. That the government did not even wait till the full enactment of the new minimum wage to law and its implementation before placing a new burden on the working people shows that it is anti-poor. Obviously, the government is not interested in alleviating the poor living conditions of working people, but rather defends a system, capitalism, that repeatedly needs to worsen it.
Linking the minimum wage implementation with VAT increase is blackmailing as it tends to suggest that workers' demand for a long-overdue, but modest, increase in their wages is the cause of inflation. Meanwhile, demand for a new minimum wage is only a defensive demand, as costs of living have skyrocketed in the last five years. Interestingly, it is government's capitalist policies of increase in fuel pump price, hike in electricity tariffs, devaluation of naira and underfunding cum commercialization of social services, which have huge contributed to the current terrible economic situations faced by working people.
The SPN also rejects the argument that only through an increment in VAT can the new minimum wage be paid. Already, workers and ordinary people are the most taxed section of the society, while the rich paid the least tax. According to government sources, only a handful of millionaires and billionaires pay tax, yet they are biggest beneficiaries of government policies and dole out. We demand that government tax the rich, who pay the least tax but corner larger parts of nation's wealth. Moreover, we contend that there are enough resources to fund new minimum wage, better social services and improved infrastructures, but only if nation's resources are redirected towards public good. For instance, reducing emoluments of political office holders by 70 percent and equipping ministry of works with adequate manpower and equipment will release hundreds of billions of naira currently going to the private pockets of politicians and big time contractors. Also, renationalisation of nation's mineral and natural resources already privatised, under public control, will provide opportunity to begin to mobilise resources to fund new minimum wage, provide millions of decent jobs, expand social services and infrastructures.
Conclusively, the SPN calls on the labour movement to mobilise and reject the planned increase in VAT, and insist that the N30,000 minimum wage be implemented across the board without any odious conditions attached. While the new N30,000 minimum is not a real living wage, it is less than half of the N65,000 Labour was demanding last year, its implementation would be a step forward. However with the way the federal government is planning to use the whip of increase in VAT to undermine new minimum wage, state governments and private sector employers will also use retrenchment as condition for implementation of the new minimum wage, unless the labour movement begins the process of mobilising working people and youth to oppose these neo-liberal policies.
For us in the SPN, the latest government onslaught against the working people and the poor only confirm our position that the APC, just like its PDP counterpart, is an anti-working people's party premised on capitalist ideology of making the poor poorer and the rich few richer. The worsening living conditions in the last four years, following 16 years of PDP implementation of anti-poor policies, is a confirmation of our position. Only mass struggle of working people, youth and the masses, can stop further attacks being planned by the APC and PDP in the next four years. Only socialist programmes and policies can mobilize resources and manpower to ending mass suffering in the midst of superabundance.