Taxing People in Extreme Poverty Is Unjust – NLC

 

The Nigeria Labour Congress (NLC) has condemned a suite of new federal tax laws, particularly the consolidated Nigeria Tax Act, 2025, and other associated reforms that took effect on January 1, 2026. 

The NLC describes these laws as regressive because they place an unfair burden on workers and low-income Nigerians.

Meanwhile, Nigeria's taxation system, administered by federal and state authorities, has undergone a major overhaul with the Nigeria Tax Act (NTA) 2025. The reforms aim to streamline compliance, broaden the tax base, and align with global standards.

Key Reasons for NLC's Condemnation

Taxation of the National Minimum Wage: The NLC argues that taxing the national minimum wage is unjust, especially amidst escalating inflation and economic hardship, as it erodes the purchasing power of the poorest workers.

Exclusion from Formulation: NLC President Joe Ajaero stated that the labor unions, who represent the major taxpayers in the country, were deliberately excluded from the Presidential Committee on Fiscal Policy and Tax Reforms and the subsequent legislative processes, making the laws fundamentally unjust.

Increased Burden on Low-Income Earners: The NLC warns that the new tax laws and potential future increases, such as the proposed VAT hike from 7.5% to 10% in 2026, could worsen poverty and deepen hardship for millions of citizens.

Allegations of Manipulation: The NLC has urged Nigerians to reject what it calls "distorted or falsified" tax laws, following concerns raised in the House of Representatives about discrepancies between the bills passed by the National Assembly and the gazetted versions signed into law.

Lack of Social Justice: The Congress insists on "tax justice," where the wealthy pay their fair share and regressive taxation is removed. It argues that any tax system that fails to provide social protection and includes workers in its formulation is unacceptable.

The NLC has demanded the immediate suspension of the laws for a comprehensive review and has warned of potential collective action and resistance if the government ignores its concerns.