Insurance companies in Nigeria have appealed to leadership of the National Assembly to reflect insurance industry’s observations to the proposed Tax Reform Bill if the whole idea of the bill is to help the growth of companies and institutions in the country alongside the generation of the desired revenue needed to run affairs of the country.
Chairman of the Nigerian Insurers Association (NIA) Mr Kunle Ahmed who made the appeal in Lagos during an interactive session with financial journalists said that the nation’s insurance industry is in support of pragmatic laws, policies and programmes of government which are intended to enhance the impact of governance as well as precipitate conducive environment for the growth of businesses both local and international. NIA is the umbrella body of all registered insurance companies in the country.
Mr Ahmed said that it is the considered opinion of the NIA that certain aspects of the proposed Tax Reform Bill as it relate to insurance are not properly structured thus requiring a review. He listed the area which intend to apply the tax deductions on insurance companies’ Gross Premium Income (GPI) as not been properly thought out considering that the GPI does not reflect the actual income of insurance companies. Applying the tax based on GPI he said will hurt insurance companies.
“Changes on Tax Bill can affect every aspect of the economy. Taxing insurance premium will not be good for the industry. We have made presentations which we are sure that they are been looked into. Gross Premium Income should not be the basis for tax deductions and this should not be. The whole money is not premium as some of them are money kept with insurance firms”, he explained.
He applauded efforts of the National Assembly in passing the consolidated insurance bill while hoping that the president will soon sign it into law.
“The bill is a significant legislation and its implementation will help improve our operations. Some of the laws governing the conduct of insurance before now are outdated hence the relevance of the new bill which was recently passed by the Assembly”, Mr Ahmed disclosed.
The proposed share capital structure of N25 billion for general business and N35 billion for reinsurance companies he said will help companies increase their retention capacities as well as acquire the muscle to improve on their products, policies and claims payment. When signed into law, Nigerian insurance companies he revealed will be among the highest capitalized insurance firms in Africa, a situation he said will help them improve on their cross boarder operations.
On the issue of Third Party Motor insurance, Mr Ahmed advised car owners to take advantage of the enhanced benefits of the policy to adequately protect their property as well as other road users. Third Party Motor insurance offers compensation of up to N3 million. He commended efforts of the police in enforcing compliance.
The NIA Chairman promised to build on his four point agenda which include advocacy, digital innovation, human capital development and intergovernmental relationship in improving the fortunes of the nation’s insurance industry during his tenure as the NIA chairman.
