The Minister of Budget and National Planning, Udoma Udo Udoma, has revealed that the Federal Government may have to increase Value Added Tax (VAT) to fund the new N30,000 minimum wage.
During plenary on Tuesday, March 19, 2019, the Senate approved the N30,000 minimum wage which will increase the minimum wage from N18,000.
While addressing the Senate Committee on Finance for an interactive session over the 2019-2021 Medium Term Expenditure Framework and Fiscal Strategy Paper, MTEF/ FSP on Tuesday, Udoma said many changes will have to be made to afford the new wage structure.
“The current minimum wage of N18,000 is really too low. It is difficult for workers to manage on that amount.
“The President supported a review but it is important that as we are reversing it, we should be able to fund it.
“It is in the light of this that we would be coming to you (Senate), because there may be the need to make some changes, especially the VAT, in order to fund the minimum wage once it is announced,” he said.
The minister also revealed that the Technical Advisory Committee on the implementation of an increase in the national minimum wage will present its report to President Muhammadu Buhari this week.
The president inaugurated the committee on January 9 with a directive to complete its deliberations and submit its report and recommendations within one month.
The committee’s main task is to help the Federal and State governments avoid a fiscal crisis with the proposed new wage by advising on ways of funding an increase in the minimum wage, and the attendant wage adjustments, without having to resort to additional borrowings.