New tax law’ll boost insurers’ profitability, recapitalisation –NIA
The Finance Act 2020 has solved the issue of excess taxation on company profits to the effect that no further tax will be paid on any undistributed profit that has already been taxed.
The Nigerian Insurers Association said this in a statement which was signed by its Director-General, Mrs Yetunde Ilori, while lauding the Federal Government for the speedy assent to the Finance Act 2020.
The association described the move as a welcome development which would usher in a new lease of life for insurance companies.
“It is a major succour for member companies in the on-going recapitalisation exercise and the Federal Government should be appreciated for the Act which has become a game changer by ensuring the fair taxation of insurance companies,” she said.
Ilori also commended the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed, and her ministry for taking special interest in matters affecting the insurance industry.
She noted that her desire to promote the business of insurance would continue to be appreciated as insurance was the backbone and livewire of any economy.
According to her, the various amendments brought about by the provisions of the Act, lifted a huge tax burden off the insurance companies which 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.
Giving specific details, she stated that Sections 5 and 6 of the Finance Act, 2020 repealed the punitive and outdated provisions of Section 16 of the Companies Income Tax Act on the taxation of insurance companies, resolving significantly tax issues identified on insurance industry taxation.