The nation’s insurers have called for a review of the Companies Income Tax Act (CITA) 2007, to relieve business operators the heavy tax burden enshrined in the law.
Specifically, National Insurance Commission (NAICOM) and the Nigerian Insurers Association (NIA) want the Federal Government to suspend or waive some sections of the Act considered to be business unfriendly.
The industry’s position was made known to the government by the Commissioner for Insurance/Chief Executive, National Insurance Commission, Mohammed Kari and the Chairman of NIA, GUS Wiggle at a meeting with the Minister of Finance, Mrs. Kemi Adeosun and the industry in Abuja.
Kari said that “the industry has complained of excessive and supposed unfair assessment modalities being used by tax authorities for tax computation of its finances. We plead with the new government and the tax authorities to pick interest on this and continue with the engagement with the industry to find lasting solution to this problem, so that the industry can play the expected role of investible and developmental fund provider for the Nigerian economy”.
He raised concern over government’s general attitude to insurance stressing that there is need for an improvement. “There is low patronage of insurance by government and its agencies and the lack of effort to protect public assets. Even when it does insure, funding is haphazard. It is common knowledge that the ability of government to replace damaged or lost assets is not as sound as it use to be, as such, insurance is the best alternative to no protection at all. Besides, employees especially our gallant forces fighting in security challenges need to have the comfort of insurance protection as they confront their duties.”
The NIA helmsman, Wiggle said the obnoxious tax law placed a cap on expenses and claims payable by insurance companies, adding that it was discouraging to foreign direct investments in the insurance sector.
The NIA boss urged the Minister to assist the insurance industry by setting in motion the process of amending the tax law to reflect present day realities and in line with global trends and best practice.
He said, “Whilst congratulating you on your appointment, we wish to draw your attention to the crippling effects of CITA 2007 on insurance business in Nigeria. The law expects insurance companies to pay 20 per cent of their premium as tax irrespective of expenses or losses incurred. We believe that it is not only punitive, it is also anti-investment”.