NLC,TUC suspend strike for 30 days, as FG suspends VAT on diesel, commits N100bn for CNG buses

Oredola Adeola

The Nigeria Labour Congress (NLC) and the Trade Union Congress (TUC) have suspended their proposed industrial actions for 30 days after agreeing to a Memorandum of Understanding (MoU) with the Federal Government, which includes the suspension of collection of Value Added Tax (VAT) on Diesel for six months beginning from October 2023, and the committal of N100 billion for the provision of high capacity CNG buses for mass transit in Nigeria.

This was contained in a MoU signed by Comrade Joe Ajaero, President NLC, Comrade Festus Osifo, TUC, Simon Lalong, Minister of Labour and Employment, Dr Mallam Mohammed Idris, Minister of Information and National Orientation, Dr. Nkeiruka Onyejeocha, Minister of State for Labour and Employment after a series of meetings in the last couple of days which ended on Monday.

Based on the MoU the Federal Government agreed to a wage increase of N35,000 only for all Federal Government workers beginning from September pending when a new national minimum wage is expected to have been signed into law.

The Government also agreed to suspend the collection of Value Added Tax (VAT) on Diesel for six months beginning from October 2023.

EnergyDay gathered that the final agreement to suspend the 7.5 per cent Value Added Tax (VAT) on diesel was part of the measure aimed at alleviating the burden on businesses and consumers and creating a fairer tax system.

Taiwo Oyedele, Chairman, the Presidential Tax Committee in August during the inauguration of the Presidential Committee on Fiscal Policy and Tax Reforms Committee had earlier suggested this as part of his coordinated strategy to elevate revenue reporting and quality of spending.

EnergyDay gathered that the Nigerian Customs Service (NCS) and the Federal Inland Revenue Service (FIRS) in July 2023, commenced the implementation of the 7.5% Value-added Tax (VAT) on diesel imported into Nigeria, after the process was agreed upon in June 2023, claiming that the petroleum product was not exempted from the payment of VAT based on the VAT Modification Order 2021.

As part of the MoU with the organised labour, the Federal Government also agreed to vote N100 billion for the provision of high-capacity Compressed Natural Gas (CNG) uses for mass transit in Nigeria and also to make provision for initial 55,000 CNG conversion kits to kick start an autogas conversion programme, whilst work is ongoing on state-of-the-art CNG stations nationwide.

The Government confirmed that the rollout will commence by November 2023 with pilots across 10 campuses nationwide.

The FG delegation and the labour unions also agreed to a joint visitation to Nigeria’s refineries to ascertain their rehabilitation status.

While the FG has announced that the rehabilitation works on the Port Harcourt refinery will be completed in December 2023, the joint visitation is expected to provide more insight into the rehabilitation status of all the refineries in Warri, and Kaduna .