Tax Policy Partner and Africa Tax Manager at PricewaterhouseCoopers, Mr. Taiwo Oyedele, has criticized plans to impose a new corporate tax to raise funds for the National Youth Service Corps program. He said it was counterproductive to continue imposing taxes on businesses struggling to stay afloat.
The House of Representatives on Tuesday passed a bill – NYSC Trust Fund (Establishment) Bill – to create the National Youth Service Corps Trust Fund. The Senate has yet to approve the bill for passage.
The Fund is to be financed by a 1% levy on the net profit of businesses and organized private sector enterprises operating in Nigeria; 0.2 per cent of the total revenue accruing to the account of the federation; and any seed grants and special response funds that may be provided by federal, state and local governments of the federation.
According to the bill titled “A bill to establish a National Youth Service Corps Trust Fund for the purpose of providing a lasting source of funds for the National Youth Service Corps, the acquisition of skills, training and empowerment of corps members, training and retraining of National Youth Service Corps personnel, camp development, and NYSC training and facilities; and for related matters, the NYSC would still be entitled to funds from other sources.
Speaking on the proposed tax, Oyedele said there had been a plethora of related taxes imposed on already beleaguered citizens and businesses, with little or nothing to show for the money generated.
Oyedele, a seasoned tax expert, said: “Introducing a new corporate tax to fund the NYSC regime is counterproductive. We have similar taxes earmarked for funding higher education, information technology, industrial training, policing, science and engineering, local content and recently a bill was adopted to finance tertiary health care and the list goes on. Unfortunately, there is little or nothing to show for these taxes and the enormous costs to taxpayers that come with them.
“The business environment is tough enough as it is; coping with rising inflation impacting costs, scarcity of foreign currency to import materials and equipment, poor infrastructure, especially electricity and transport, excessive regulation and insecurity , among others.
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