The Director General of the Youth Service, General Muhammadu Fadah recently announced that the NYSC trust fund which has just been passed into law by the national assembly and awaiting Presidential approval will be of benefit to skilled Corps members.

The legislation is titled, ‘A Bill for an Act to Establish National Youth Service Corps Trust Fund to provide a Sustainable Source of Funds for the National Youth Service Corps, Skill Acquisition, Training and Empowerment of Corps Members, Training and Retraining of the Personnel of the National Youth Service Corps, Development of Camps and NYSC formations and Facilities therein; and for Related Matters.’

The trust fund is aimed at helping to address infrastructure deficits in the scheme and provide start-up capital for interested corps members to drive their business initiatives. It will also help train and retrain NYSC personnel and develop camps and NYSC formations and provide facilities therein.

If assented NYSC Trust Fund Establishment Bill was passed into law by the National Assembly would mean a 1% tax imposed on corporate companies in the country. The 9^th national assembly has on various occasions moved for the imposition of different taxes on corporate companies, some of which were passed while others are still on the floor of the house.

Also, the trust fund will be funded with 0.2% of total revenue accruing to the federation account and any takeoff grant and special intervention fund as may be provided by the federal, state and local governments of the Federation.

Tobore and Itunu were on dream city to discuss the intricacies and implications of this development.

It is really strange at a time when there is lack of opportunity, the environment is not friendly enough, there is inflation everywhere with the cost of diesel not pocket friendly and the naira devaluing every day.

Imposing a new levy tax will be a burden on organizations and it will scare away foreign investors from coming into the country because the companies are paying a lot of taxes and now the national assembly is adding to it. This is heavy on these companies especially when you look at the cost of running an organization, paying staff, cost of production, and running diesel.

One can only wonder if they sought advice from experts in the field before thinking of imposing a tax on corporate companies. They may mean well for corps members but do corporate organizations have to bear the brunt of taxation?

A presidential aspirant said there is a need to first create an enabling environment to make sure the people have a means of generating income for themselves then you can tax them.

Many companies are now closing work early, some operate hybrid while others have gone fully remote just to cut down running costs. Comparing Nigeria to other countries will be inappropriate in this case because there are structures put in place abroad, they have good roads, good electricity supply and good minimum wages for workers.  One could easily recommend the 1% levy tax on politicians; they are earning at times money not worked for.

This is the 6^th trust fund tax that the government will be imposing on corporate companies with no major credible support the government given to SMEs, or how SMEs have hugely benefitted from policies that the government has introduced, this would have reflected on the internally generated revenue.

The major problem is that it is going to affect the economy because all of these will be factored in the cost of production, services, and delivery and this will fall back on end users which are the citizens. We should know that the Telcos tax requires that you pay 5% on every recharge you make.

Obviously, there is a gap between the government and the people. The government needs to see what people are going through every day to survive in this country. They make rules without knowing the reality and impact of those rules on the citizens.

Taiwo Oyedele, Fiscal Policy Partner and Africa Tax Leader at PwC has lamented the excessive tax placed by the National Assembly on companies’ profit in Nigeria. He posits that the taxes could end up sending organizations out of business.

“Yet another tax! This bill seeks to impose a levy of 1% of net profit on companies operating in Nigeria. Despite all evidence showing that more taxes will negatively impact the economy, it seems @nassnigeria is bent on taxing businesses out of existence.”

“If assented to by @MBuhari, this will be in addition to at least 5 other taxes on the profits of companies in Nigeria: CIT, TET, NITDA, Police levy, NASENI and NYSC levy,” Taiwo shared on his social media page.

The government claimed to have started an enabling environment with vocational programmes running for Corps members to learn certain skills because the token after their youth service will only be given to skilled Corps members.

How much will be given to corps members after their Youth Service year? Will it be enough to set up their businesses? or how the cumulative 1% tax will the distributed hasn’t been in the discussion yet. This is necessary to align with the transparent agenda of the government.

Young & Cerebral whose services include business development, considers it important to make clients and prospective clients get aware of these developments, so they could be factored into their plans to make them thrive no matter the environment.