NLC To FG: Ensure Tax On Luxury Goods Don’t Affect Items Consumed By Middle Class Nigerians

nlc_president_omarThe Federal Government’s decision to tax luxury goods has been received as a welcome development by the Nigeria Labour Congress, NLC.

The Minister of Finance and Coordinating Minister for the Economy, Dr. Ngozi Okonjo-Iweala had during a press briefing at the weekend, announced some austerity measures to cushion the effect of falling price of oil in the international market. These measures, which she said were not aimed at preventing wealthy members of the Nigerian public from enjoying their wealth but to create an avenue for them to share with those at the lower rungs of the ladder, includes an aggressive tax regime on private jets, yachts, champagne and a list of other luxury items to be announced soon.

Mrs. Okonjo-Iweala added that “As part of the response to falling oil prices, the Medium Term Expenditure Framework (MTEF) and the Budget 2015 proposal to the National Assembly have been revised. Government is now proposing a benchmark of $73 per barrel to the National Assembly compared to the earlier proposed benchmark of $78”.

Reacting to the development on Monday, the General Secretary of the NLC, Dr. Peter Ozo-Eson, said the labour union was in total support of the move to tax luxury goods and consumables in the country so long as the policy would be effectively implemented.

Ozo-Eson said that it had become imperative for the government to adopt such measures in view of the role of oil revenue in the nation’s annual budget

The NLC scribe said the measures would only make the wealthy in the society, who he claimed had not been paying their taxes, to pay more for such items consumed by them.

However, Ozo-Esan said that government had a responsibility to ensure an accurate definition of goods that must come under the category of taxable luxury items.

He said, “The international oil market situation is known, and given the role of oil revenue in the annual budget, it became imperative that some steps were taken.

“We believe that luxury goods are taxed; that the consumers pay more for them because many of the rich pay less of tax. One way of making the rich to pay tax is to target such luxury items so that those that consume them pay more”.

He pointed out that goods being consumed by middle class Nigerians could not be categorised as luxury goods.

According to him, such luxury goods should be categorised to include private jets now in large numbers in the country, high valued wines and champagne, some of which costs as much as the salary of a middle class worker, among others.

He urged the Federal Government to do the right thing by ensuring that luxury goods were defined correctly.

He said, “Goods being consumed by the middle class such as second hand cars are not luxury goods. Things like private jets that are becoming common are luxury goods.

“There are also high valued items like wines and champagne that cost more than the salary of a middle class worker.

“It is in determining the luxury item that the correct thing needs to be done. We are not against the policy if it is correctly implemented”.

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