Stakeholders in the nation’s insurance sector have called on the government to support the industry’s growth and development by collaborating with stakeholders to work out ways of streamlining the taxation applicable to the sector.
This was the major view during the one-day seminar organised by Leadway Assurance Limited in conjunction with PricewaterhouseCoopers in Lagos, to examine taxation matters within the insurance value chain.
The Executive Director, General Insurance, Leadway Assurance, Adetola Adegbayi, who was one of the panellists, argued that the insurance industry suffered from a complex tax structure that had always resulted in multiple taxation without understanding the complexity of insurance placements.
She explained the deduction of withholding tax from re-insurance commission as a fundamental problem because the practice did not recognise the fact that such commissions were not earnings, but a reserve against reinsurance credit risk for premium liabilities passed through the books of the insurer.
“Brokers, agents, insurers and re-insurers pay different taxes, all of which principally come from the premium paid by one entity – the insured –due to the nature of the insurance value chain”, she further explained.
Adegbayi, therefore, cautioned that unless all stakeholders came together to collate the entire structure of the tax burden along the insurance value chain, multiple taxation would continue to pose a threat to the well-being of the industry.
Another panellist, , Partner, West Africa Tax Leader, PricewaterhouseCoopers, Mr Taiwo Oyedele, urged the government to support the insurance industry through a review of the specific tax regime that concerned the sector, adding that as the industry was saddled with bearing the nation’s risks, it should not be burdened with taxes.
While acknowledging the concerns raised by players in the industry, the Federal Inland Revenue Service called for a yearly tax interactive session with the insurance industry to help address all tax-related concerns beleaguering the insurance industry.
The Executive Chairman, FIRS, Babatunde Fowler, represented at the event by the Regional Coordinator, FIRS, Mrs. Toluwalase Akpomedaye, noted that such sessions had helped foster understanding with other sectors of the economy.
The President, Nigerian Council of Registered Insurance Brokers, Shola Tinubu, also supported the call for an annual tax session inthe industry, pledging to take the message to the Nigerian Insurers Association and the Institute of Loss Adjusters of Nigeria.