The new national minimum wage: A double whammy scenario?

Must Read

List of United Bank for Africa (UBA) Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number that usually identifies both the bank and the branch where an account is held. The sort...

List of Access Bank Sort Codes & Branches (with addresses) in Nigeria

The sort code is a number which usually identifies both the bank and the branch where an account is...

How To Block Your Bank Account And SIM Card In Case Of Emergency

Losing your phone and wallet or having them stolen can be very frustrating. However, in case that happens to...
- Advertisement -

Following agitations from the Nigeria Labor Congress (NLC) amid the alarming rise in the cost of living, as well as unprecedented levels of poverty in the country, the National Assembly finally approved N30,000 as the new national minimum wage recommended by the tripartite committee that was set up to review the minimum wage.

Nevertheless, considering the weak fiscal structure and dynamics of most states (shallow revenue base, over-dependence on FAAC inflows, and also considering the fact that some states have been struggling to pay their workers at the current wage rate), the biggest question in the minds of many is How will a 66.7% hike in minimum wage be funded?”

The new national minimum wage: A double whammy scenario? - Brand Spur
Sources: United Capital Research

There have been rumours that the FG plans to finance the bill by increasing tax rates [Value Added Tax (VAT), Company Income Tax (CIT) and Petroleum Profit Tax (PPT)]. In our opinion, this additional tax burden, coupled with already heightened administrative expenses would undoubtedly tighten profit margins for businesses. Furthermore, the increased minimum wage could predicate possible layoffs of workers because of the higher labour cost.

- Advertisement -

Overall, we are of the opinion that the FG should implement pro-market policies to cushion the likely negative effect of the bill on the ease of doing business in Nigeria.

- Advertisement -
The new national minimum wage: A double whammy scenario? - Brand SpurThe new national minimum wage: A double whammy scenario? - Brand Spur

Subscribe to BrandSpur Ng

Subscribe for latest updates. Signup to best of brands and business news, informed analysis and opinions among others that can propel you, your business or brand to greater heights.

- Advertisement -

LEAVE A REPLY

Please enter your comment!
Please enter your name here
Read Also:  Kwara gets ₦3.7bn allocation for August – Gov. orders payment of August salary, gratuities.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

The new national minimum wage: A double whammy scenario? - Brand SpurThe new national minimum wage: A double whammy scenario? - Brand Spur

Latest News

Alibaba Merchants Sell $40B in First Half Hour of Singles Day 2020, More than 2019 Event Full Sales

Singles Day 2020 was a roaring success, cementing its position as the world’s biggest shopping holiday. The event saw...

Top Three PC Vendors Shipped 121.5 Million Units in 2020, Lenovo Leads with 47.1 Million Shipments

Remote working and distance learning amid the coronavirus outbreak continue increasing global demand for PCs and laptops. After a sharp fall in the first...

MTN’s mPulse hackathon offers funding for solutions to COVID-19 challenges

As countries grapple with the realities of the new normal, MTN Nigeria has initiated a call for entries for its mPulse hackathon, themed “Beyond...

Pandemic Pushes US Casino Industry to Over $12 Billion in Revenue Losses with 36% Drop

The United States casino industry remains on a loss-making streak in the wake of the coronavirus pandemic. The economic uncertainty continues to cast doubts...

MTN Group furthers financial inclusion

Driven to secure financial inclusion across its markets, MTN Group continues to grow the number of MTN Mobile Money (MoMo) users on its network,...
- Advertisement -
BrandsPur Weekly Cartoons
- Advertisement -The new national minimum wage: A double whammy scenario? - Brand SpurThe new national minimum wage: A double whammy scenario? - Brand Spur