Insurance stakeholders seek govt’s support on tax issues

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Stakeholders in the nation’s insurance sector have called on the government to support the industry’s growth and development by collaborating with stakeholders to work out ways of streamlining the taxation applicable to the sector.

This was the major view during the one-day seminar organised by Leadway Assurance Limited in conjunction with PricewaterhouseCoopers in Lagos, to examine taxation matters within the insurance value chain.

The Executive Director, General Insurance, Leadway Assurance, Adetola Adegbayi, who was one of the panellists, argued that the insurance industry suffered from a complex tax structure that had always resulted in multiple taxation without understanding the complexity of insurance placements.

She explained the deduction of withholding tax from re-insurance commission as a fundamental problem because the practice did not recognise the fact that such commissions were not earnings, but a reserve against reinsurance credit risk for premium liabilities passed through the books of the insurer.

“Brokers, agents, insurers and re-insurers pay different taxes, all of which principally come from the premium paid by one entity – the insured –due to the nature of the insurance value chain”, she further explained.

Adegbayi, therefore, cautioned that unless all stakeholders came together to collate the entire structure of the tax burden along the insurance value chain, multiple taxation would continue to pose a threat to the well-being of the industry.

 

Source: Punch News