Operators attribute declining profits to high income tax
OPERATORS in the nation’s insurance sector have expressed discomfort over the heavy tax burden being placed on them by the Companies Income Tax Amendment Act 2007 (CITA), which now constitutes a big clog to their profitability.
The operators said the development has capped their claims experience, describing it as anti-investment and a defeat of the essence of insurance in Nigeria.
The Deputy Commissioner for Insurance (Technical), National Insurance Commission (NAICOM), Sunday Thomas, in a telephone conversation with The Guardian on the development, said the Commission is in talks with the relevant stakeholders on the Amendment of the CITA 2007, for the benefit of all.
He said: “As a follow up to our presentation at the meeting, is to engage with the Federal Inland Revenue Services (FIRS) with a view to charting the way forward on the matter.”
The Chairman, Nigerian Insurers Association (NIA), the umbrella body of insurance underwriters, Eddie Efekoha, when contacted, was unable to comments on the matter, saying he was in a meeting. Meanwhile, the Managing Director, Linkage Assurance, Pius Apere, said, NAICOM and the NIA need to work together to address the issue, because underwriters are no longer at ease with the situation, and called on the Presidency to address the situation.
“We are optimistic that the government of the day will address the issues raised,” he said.
Apere, who spoke on the telephone with The Guardian, expressed regret over Nigerians apathy to insurance, noting that even the compulsory insurances are not being patronised, which he attributed this to the nonprosecution of offenders as well as non-enforcement of the law.
Furthermore, he cited ignorance of the benefits of insurance by Nigerians as another contributor its lack of patronage. He noted that as a result, the few that buy from fake operators and when events occur, they don’t know where to file for their claims because the insurance certificates they have are from non-existing firms.
He therefore advised the insuring public to be wise in buying covers by listening to various awareness campaigns currently going on in the media to discern between fake and genuine insurance firms.
He also urged industry operators to increase the awareness campaigns, and to pay more attention to insurance education.