Business
Insurers Seek Income Tax Waiver
The leadership of Nigerian
Insurers Association (NIA) has urged the federal government to grant waiver to the Insurance industry on some sections of the companies’ income Tax Act 2007.
The Association’s Position was made known to newsmen in Abuja by its National President Mr, Godwin Wiggle after a meeting with the minister of state for Finance, Ambassador Bashier Yuguda on Friday.
Wiggle said the industry must be saved from collapse as the law places a heavy tax burden on insurance companies operating in the country, thus making it unattractive to investors.
He said the obnoxious law placed a cap on expenses and claim payable by insurance companies in the country, stressing that such income tax law was discouraging foreign direct investment in the insurance sector of the economy.
The Association’s boss explained that the law expects insurance companies to pay 20 per cent of their premium as tax irrespective of expenses or losses incurred, adding that such law was punitive to the insurance companies and also anti-investment.
The NIA boss highlighted that section 14 (7) of the companies income Tax Act (CITA) 2007 as amended restricts the number of years over which an insurance company can carry forward its tax losses to four years.
He said section 14 (8) (b) and section 14 (9) (c) of CITA 2007 specified the basis for calculation of unexpired Risk which amount to adoption of different basis for the computation of minimum tax payable by insurance companies, stressing that this basis differs significantly from that adopted for other Nigerian companies.
Wiggle said section 14 (8) (a) dealing with minimum Tax Prescribing percentage basis of calculation of reserves for unexpired risks for tax purposes rather than time apportionment which is prescribed in section 20(1) (a) of the insurance Act 2003.
He said section 14(8) (6) of CITA as amended deals with deductibility provides for the restriction of other reserves, claims and outgoings for the purpose of computing taxes payable by insurance companies.
The NIA boss urged the relevant stakeholders to assist the insurance industry by setting in motion the process of amending the law to reflect present day realities and inline with global trends and best practice in the insurance sector.
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