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FG Directs NAICOM to Strengthen Insurance Industry with New Policies, Products

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By Tony Obiechina  Abuja 

The Federal Government has directed the National Insurance Commission (NAICOM) to deepen insurance penetration in the country by making insurance companies develop new insurance products and policies.

Minister of Finance, Budget and National Planning Mr Zainab Ahmed gave the directive when the Governing Board of NAICOM paid her a courtesy visit in Abuja on Monday.

 

The Delegation was led by the Board Chairman, Dr Abubakar Sani, including the Commissioner for Insurance, Mr Sunday Thomas.

Addressing members of the NAICOM board, Zainab Ahmed said “there would be a need to achieve more insurance penetration in the country. In this regard, there is a need to evolve new insurance products and policies”.

The Minister further said, “members should commit to develop and implement policies that would promote the reputation of the industry through prompt payment of claims.

Your target should be to take the industry to greater and enviable heights during your tenure”.

Stressing the need for a good Working Relationship with the Ministry, Ahmed said, “it is of utmost importance for the New Board and the Management of the National Insurance Commission to work harmoniously together in order to actualize the mandate of the Commission. 

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“The Board has to develop strategies to systematically build the capacity of members through Workshops, Seminars, Study Tours, etc. to enable effective contribution towards the growth of the Industry”., 

In his address, Chairman Governing Board of NAICOM Dr Abubakar Sani told the minister that they are “working hard to proffer solutions to curb the ugly trend of insurance failure by way of instituting strong regulatory measures in the Board of directors of all the insurance entities to make them perform better, by adhering to their corporate rules that establish them”.

NAICOM, he added, will “enforce the professional code of ethics among the insurance entities, strengthen their corporate governance, which the board believes will sanitize the market”.

He then disclosed that the NAICOM Board will in due course “revisit the matter of recapitalization of the insurance industry and clean up its act with the enforcement of code of ethics of insurance profession and practice, and code of good corporate governance in companies”.

In addition, he said  the Board has promised to create an enabling environment “for insurance industry to beef up their capital through mergers and acquisitions, and invitation of fresh capital from the local and international investors”.

“Accordingly, Investors Forum where insurance companies that need capital will interact with potential investors: insurance companies will come together to showcase themselves where there will be due diligence to enable potential investors to know their financial status”.

See also  Insurance Industry Realizes N630.36bn, Pays N238.05bn Claims In 2021–NAICOM

The Board appealed to the minister to support their effort to look “for investors that would make the Nigerian insurance industry robust to effectively strengthen the entities to play their roles in making other businesses thrive in the country”.

To this end, Dr Sani said “NAICOM will organize an insurance investment forum in Nigeria and abroad with the sole aim of wooing potential investors to take advantage of the potentials in investing in Nigeria Insurance Industry”.

The Board he noted will seek the collaboration of Nigerian Investment Promotion Council, National Assembly Committee on diaspora, and other insurance jurisdictions across the globe. We want to extend our investment campaign to Europe, the Middle East and America.

The NAICOM Board Chairman said the Commission “is working to sanitize the market, and will be taking out companies that are not measuring up to expectations.

According to him, “we will install the mechanism to review all the actuarial valuations submitted to the commission for assessment and consideration”.

In order to enhance the performance of the regulatory body, Dr Abubakar Sani said NAICOM’s “strategic plan will be reviewed to align with the objectives of the commission as contained in the matching order and directives; where The Minister specifically asked the Board to uplift the insurance industry to a greater height, on the day our Board was inaugurated”.

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He also asked for the minister’s support “to exterminate the menace of fake insurance policies in the country, which deny huge revenue to the insurance entities and taxes to the government”.

“In our action plan we will solicit the cooperation of your ministry to institute an insurance task force that would enforce compulsory insurance in the country.

“The task force that will be deployed, should be made of the Police, Vehicle Inspection Officers (VIO) and Nigerian Civil Defense” he said.

Abubakar Sani assured the minister that NAICOM will build a strong, viable and 21st century insurance industry in Nigeria. That is in addition to deepening insurance in the country, and “raise positively, its contribution to the domestic gross product in the Nigeria economy”.

Business News

 Bill to Amend CBN Act goes for 2nd Reading in Senate

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The Senate on Tuesday at plenary, passed for second reading, a bill to amend the Central Bank of Nigeria (CBN) Act.

Leading debate on the general principles of the bill, its sponsor, Sen. Sadiq Umar (APC-Kwara), said the bill was to enable the appointment of a person other than the Governor as Chairman of the Board of CBN.

He said the bill was also designed to divest the powers of the board on determining and fixing salaries and allowances of its members.

According to him, the bill if passed, will be used to determine consideration and approval of the annual budget of the CBN.

Suleiman said the envisaged new chairman of the proposed board of the CBN, would have powers to determine salaries and allowances of members, while the Governor focused on administrative duties of the bank.

In her contribution, Sen. Betty Apiafi (PDP-Rivers), called for a holistic amendment of the CBN Act, adding that the CBN governor went out of his way to indicate interest to participate in politics while in office.

She said the development was not the trend in the world, given that election materials were kept in CBN.

Senators Enyinnaya Abaribe (APGA- Abia), James Manager (PDP-Delta), Orji-Kalu (APC-Abia) kicked against the hasty amendments to the bill, while Sen. Barau Jubril (APC-Kano), supported the bill in his submission.

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President of Senate, Ahmad Lawan, however, cautioned senators to focus on the proposed amendment rather than deliberating on alleged attempt by the CBN governor to contest as that wasn’t part of the general principles of the bill.

Lawan, thereafter, put the passing of the bill for second reading to a voice vote and senators voted unanimously for its passage.(NAN)

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Economy

FG to Deploy PPP Solution to Boost Excise, Tax Revenue

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The Federal Government says it is set to deploy an Integrated Secure Track and Trace Solution to boost revenue earnings through excise and tax collection.

The Director-General, Infrastructure Concession Regulatory Commission (ICRC), Michael Ohiani, said this while presenting the Outline Business Case (OBC) Compliance Certificate to the Minister of Finance, Budget and National Planning, Zainab Ahmed.

A statement issued by Ms Manji Yarling, the Acting Head Media and Publicity, ICRC in Abuja on Tuesday, said the project was aimed at mitigating the country’s dwindling revenue and foster more non-oil revenue streams.

“The PPP solution will adopt the Build, Operate, and Transfer option.

“It will allow the Federal Government, through the Ministry of Finance, to establish an effective and non-intrusive control on a broad range of goods and services subject to excise duty, safety, and standards,” Yarlling said.

While receiving the OBC certificate, the minister said the proposed solution was important at this time, as the government was currently constrained in terms of revenue and required an urgent boost.

According to Ahmed, the purpose of the project is to enable the ministry to have visibility over some key products that are made in Nigeria, in terms of the quantity and companies that produce them.

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“It is also to differentiate between the same products produced in Nigeria and the ones that are imported, the bottom line is for us to be able to maximise our revenue potential.

“Having had several meetings with the proposing company, we thought that the best way to do this is through a PPP model and I am glad that the OBC Compliance Certificate has been issued,” the minister said.

Ahmed said that as the fiscal authority of the government, the ministry of Finance had the responsibility to ensure that duties and taxes were paid.

She said the ministry’s responsibility was also to assist relevant agencies to make their work more seamless, hence the need to deploy the solution.

The minister promised that the solution was not going to put more burden on companies, as the duties to be collected were not going to disrupt manufacturing in any way.

“I am assuring that the manufacturing companies’ businesses will not be disrupted, they are not going to incur any additional cost, the excise duty that will be charged will be a pass-through cost.

‘We are convinced that this is the right thing to do,” she said.

Ahmed expressed confidence in the solution citing that the same infrastructure had been deployed by the same company in South Africa and Morocco to boost their revenue accruals.

Ohiani while presenting the OBC, said that the solution would bring about many benefits to Nigeria including stemming illicit trade and revenue leakages; and improving revenue generation for government.

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Other benefits he said include ensuring the circulation of high-quality goods and services; achieving economies of scale and synergies among ministry’s agencies; enhancing technology and knowledge transfer and generating employment opportunities.

“The proposed solution when implemented will allow the Federal Government of Nigeria to establish effective and non-intrusive controls on a broad range of markets.

“Markets such as goods and services subject to excise duty, and goods subject to conformity with health, safety, and quality standards.

“Additionally, the solution aims to reduce the levels of counterfeiting, sub-standard quality, tax evasion, and under-declaration in these markets,” Ohiani said.

He pointed out that the ICRC and the ministry would now proceed to the procurement stage.

“A Full Business Case (FBC) Compliance Certificate would be issued for onward submission to the Federal Executive Council (FEC) for project approval,) (NAN)

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Business News

Good Tax Revenues ‘ll Enhance  Compliance – FIRS

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By Tony Obiechina, Abuja 

When governments deploy tax revenues for the common good of the citizens, there is a concomitant increase in tax compliance by citizens who see the direct benefit of the taxes they pay.

This was the position held by the Executive Chairman of the Federal Inland Revenue Service (FIRS), Muhammad Nami during his opening remarks at the launch of the Public Finance Database by the Nigeria Governors’ Forum at the Wells Carlton Hotel, in Abuja, on Tuesday, last week.

Mr.

Nami argued that the low compliance tax rate in most developing countries was as a result of the failure of the social contract between the taxpayers and the government, noting that those in political leadership in the country had a duty to promote a tax-paying culture by relating projects and infrastructural developments executed by them to taxes paid by taxpayers.

“Taxpayers need to see what has been done with their money to be encouraged to continue to pay their obligations under the Social Contract they have with the government.

“I am delighted that one of the sessions focuses on the tax-for-service programmes as they impact tax revenues. This issue is dear to us as tax administrators as there is a nexus between the effective utilization of tax revenue and tax compliance,” he stated.

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“The low level of tax compliance in developing countries can be attributed to the failure of the social contract between the taxpayers and the government. It is expected that if the citizens are committed to paying taxes, the government should be committed to using the taxes for the common good of all citizens.”

The FIRS boss further argued that projects funded by taxpayers’ moneys should be reported as such and not personalized so that citizens would begin to relate these projects as the proceeds of their taxes.

“Those in political leadership should promote the tax-paying culture by relating projects and infrastructural developments executed by them to tax.

“The government at all levels are doing a lot with taxpayers’ money but citizens do not easily appreciate these facts because of the way and manner the projects are reported.

“There is the need to de-emphasize and de-personalize projects so that the citizens will begin to relate all the ongoing laudable projects in the states to tax revenue. This singular act to a great extent will increase the tax morale and enhance compliance.”

Mr. Muhammad Nami, an advocate for a harmonized tax system as a cure for tax revenue leakages used the platform to call for the country to make a bold paradigm shift  by harmonizing the country’s tax system to optimize tax revenue collection.

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“Recently, there has been a clamour for a holistic review of our tax system. Its proponents, including myself argue that if Nigeria must achieve its tax revenue potentials as the fulcrum of economic development, a harmonisation of our tax system must be undertaken.

“Tax harmonisation for enhanced revenue generation, which was the theme of the 2nd National Tax Dialogue was carefully chosen to reiterate the need for us as a nation to rethink the current tax system being operated.

“There was a consensus at the dialogue that Nigeria needs a transition to a unified tax administration as practised globally by most of the efficient and effective tax jurisdictions that have achieved optimum tax revenue collection. 

“Certainly, there is no gainsaying that if Nigeria must be less dependent on external borrowing and buffer from the volatility and dwindling oil revenue, there should be a paradigm shift. Beyond politics and sentiment, the country should be willing to make those bold and hard but beneficial tax reforms and there is no better time than now, if we must avert the looming debt crisis. The gains from a harmonised tax system far outweigh the fears expressed in some quarters, if dispassionately analysed.”

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