By Cynthia Alo
Director General of the Nigerian Insurers Association (NIA) Mrs. Yetunde Ilori, has said that the new Finance Act 2020 will improve the insurance industry contribution to the Gross Domestic Product, GDP, in Nigeria.
Insurance industry contribution to the GDP currently stands at 0.32 percent.
Ilori stated: “The Act would promote reform of tax laws to align with global best practice and it is expected that it will enhance the industry contribution to GDP and encourage investors whilst entrenching Ease of Doing Business. This will help the insurance business to thrive and attain its full potentials”.
Ilori, who commended President Buhari for the speedy assent to the new Finance Act, said the move would usher in a new lease of life in insurance companies.
In a statement signed by Head, Corporate Communications, Human Resources & Administration, Mr. Davis Iyasere, Ilori said that insurance companies had endured years of excruciating tax burden under CITA 2007 which did not place insurance companies at a level playing field with companies in other sectors of the Nigerian economy.
According to her, “Sections 5 and 6 of the Finance Act, 2020 repeals the punitive and outdated provisions of Section 16 of the CITA on the taxation of insurance companies thus resolving significantly tax issues identified in the insurance industry taxation.
“The new Act has eliminated among other things, restriction of tax-deductible claims and outgoings to the percentage of the total premium, restriction of the period to carry forward tax losses to four years, the special punitive deemed profit as the basis for minimum tax computation and the Finance Act also resolved the issue of computation of deductible unexpired risk by adopting the use of a time apportionment basis in line with the Insurance Act.”