Nigerian Insurers Association (NIA) has appealed to the Federal Government to intervene over the lingering issues of Companies ‘ Income Tax Act (CITA) 2007, as the law places a heavy tax burden on insurance companies operating in the country, making them relatively unattractive to investors.
The Chairman of the Association, Godwin Wiggle, while addressing a press conference in Lagos. explained that said the obnoxious law has placed a cap on expenses and claims payable by insurance companies, adding that it was discouraging foreign direct investment in the insurance sector.
According to him, “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”.
He explained that a representative of the governing council met with the executive management of the Federal Inland Revenue Service (FIRS) on issues relating to some of the provisions of CITA 2007 and the effect on the insurance sector.
“Basically, what we tried to share with them is to highlight the draconian provisions in the CITA 2007. We tried to let them appreciate the fact that by the execution of the law, it will make it very unhealthy for any insurance company operating in the country to survive. It is expected that our engagement will resolve the issues observed.
On his two year tenure, he said: “Looking back at the agenda we set for ourselves at the beginning of our tenure, we want to say that we have made some modest achievements during the period. We have continued to engage the National Insurance Commission on issues that affect the business of our members and this will continue as issues may arise.
“There is also an on-going initiative to improve market conduct and market discipline. Besides, the association and other regulators such as Securities and Exchange Commission, FIRS, National Pension Commission and Nigerian Stock Exchange on issues bothering on the effect of their oversight activities on member companies”.
