The signing into law on Monday of the Finance Bill 2019 has brought a sigh of relive to insurance companies in Nigeria, as this has removed certain clauses in the tax law that were unfair tax burdens to their operations.
With this Bill now into law, insurance companies would be able to carry forward losses indefinitely as opposed to the 4-year restriction currently in place.
Life and non-life businesses would no longer be liable to special minimum tax provision and all wholly, exclusively, reasonably and necessarily incurred expenses will be tax deductible.
Furthermore, “taxable investment income” would be limited to “income derived from the investment of shareholders’ funds”. This seeks to clarify taxable income and limits it to income accruing to the insurance company as against income accruing to the insurance fund., according to experts analysis.
According to experts, this is game changer in ensuring the fair taxation of insurance companies.
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