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FG Approves N25,000 Provisional Wage Increase For All Workers

The federal government has said that the N25,000 provisional wage increment announced for low-grade workers is now applicable to all levels of civil servants.

Femi Gbajabiamila, chief of staff (CoS) to President Bola Tinubu, announced the development on Sunday evening.

Speaking at the end of the four-hour meeting with the leaders of the Nigeria Labour Congress (NLC) and Trade Union Congress (TUC) at the State House, Abuja, Gbajabiamila said the government team and the labour leaders have reached some resolutions.

The meeting was called by the federal government to avert the planned nationwide indefinite strike by the labour to protest against the removal of the petrol subsidy and other issues.

“I am happy to say that after four hours, we have reached certain agreements that are for the benefit of the Nigerian worker,” Gbajabiamila said.

“Agreements on wage bills, agreements on committees on salary increments, CNG buses, on several other things, I believe, both TUC Labour and government side.

“Hopefully, we expect that labour will call a meeting of their various branches and executive tomorrow to present the agreements that have been reached, and we pray and we believe and we hope that the strike will be called off on Tuesday.

“So I want to once again, thank labour for taking time out on a good Sunday like this one when they should be with their families to come and discuss in the interest of the workers. Thank you very much.”

Before the resolutions were reached, the labour had rejected the N25,000 provisional wage increment for low-grade workers announced by the president.

In a statement issued at the end of the meeting, Mohammed Idris, minister of information and national 0rientation, said the federal government is “committed to fast-tracking the provision of compressed natural Gas (CNG) buses to ease public transportation difficulties associated with the removal of PMS subsidy”.

He added that the government would see to the provision of funds for micro and small-scale enterprises, adding that the value-added tax (VAT) on diesel will be waived for the next six months.

“The Federal Government will commence payment of N75,000 to 15 million households at N25,000 per month, for a three-month period from October-December 2023,” the statement reads.

“A sub-committee is to be constituted to work out the details of implementation of all items for consideration regarding government interventions to cushion the effect of fuel subsidy removal.

“NLC and TUC will consider the offers by the Federal Government with a view to suspending the planned strike to allow for further consultations on the implementation of the resolutions above.”

LABOUR TO CONSULT NEC

While addressing journalists, Joe Ajaero, president of NLC, said the labour body would take all the promises by the government to its organs for consideration.

“I don’t have much to say than what the Chief of Staff has said. We’ve been meeting and we’ve looked at almost all the issues,” he said.

“All the promissory notes from the government and we’ll look at how to translate them to reality and to be workable.

“Then we’re going to take those promises to our organs, of course, you know these people here cannot just wake up and review and call off action.

“So as he said, we’re hopeful that our organs will have a look at them and give us a fresh mandate on what next to do. So it’s a simple one.”

Also, Tommy Etim Okon, acting president of TUC,  said they would confer with their respective organs for the next line of action.

“Let me on behalf of the TUC also point out the fact that we’ve had a series of conversations surrounding the issue raised and we do hope that by tomorrow we are going to get across to our organs so that we can also look at it and cross-fertilize ideas and see the way forward,” Okon said.

“I’m sure we’re coming back again tomorrow for that.”

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News & Announcements

The FG introduces a 7.5% VAT on diesel.

The payment of the 7.5% Value Added Tax on Automotive Gas Oil, also known as diesel, was officially announced by the Federal Government on Monday.

In Abuja, representatives of the Federal Inland Revenue Service and the Nigerian Customs Service reaffirmed that AGO was not exempt from paying VAT in accordance with the VAT Modification Order 2021.

Nigerians, however, criticized the news, pointing out that people were still attempting to acclimatize to the increase in the pump price of Premium Motor Spirit, more commonly known as gasoline, without being aware that preparations had been made to further increase prices for diesel.

Our correspondent inquired as to whether the NCS was currently collecting 7.5% VAT on AGO imports, and Abdullahi Maiwada, the service’s spokesperson, responded, “Yes.”

He continued, “If you ask me whether Customs collect 7.5 per cent VAT on AGO, I will tell you yes and I’ll give you the reasons. There’s what we call VAT Modification Order 2021, which exempts petroleum products of Harmonised System Codes.

“But the HS Codes for Petroleum products that are exempted from paying VAT are those in the region of 2709.00.00.00 – 2710.19.12.00. The HS Codes are what we use to classify commodities. But AGO is classified under HS Code 2710.19.21.00, which is not exempted from the payment of VAT. Now, this is based on the VAT Modification Order 2021.”

Tobi Wojuola, a representative of the FIRS, reaffirmed the development and emphasized that it was in line with the VAT Modification Order’s position.

“The position of the VAT Modification Order 2021 is that VAT is chargeable on diesel,” he said.

The NCS made it plain that VAT must be paid on diesel in a letter to certain of its employees on the subject with the reference: NCS/T&T/T/899/217/VOL.I, spotted in Abuja and dated June 8, 2023.

On behalf of the Deputy Comptroller-General (Tariff and Trade), the letter was signed by Mba Musa, Assistant Comptroller-General (Tariff and Trade).

It read in part, “I am directed to forward a letter from Federal Inland Revenue Service on the above subject matter. The VAT Modification order 2021 only exempts petroleum products of HS codes 2709.00.00.00 – 2710.19.12.00 from payment of VAT. AGO or diesel falls classifiable under HS Code 2710.19.21.00 and is not exempted from paying VAT.

“Subsequent upon the above, all future importations of the product should assess and pay VAT at the point of entry into the country. Also note that AGO or diesel are not exempted from destination inspection or import guidelines and as such are expected to process Form M and PAAR as well as make declarations appropriately in the NICIS II system.

“A copy of the letter from FIRS is attached for your information. Take note and be guided accordingly, please.”

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