Category: Insurance

WAPIC Insurance Plc has, within the period ended September 30, 2019 grown profit to N2.45 billion, a 78 per cent year-on-year (YoY) growth from the N1.38 billion recorded in the preceding period of last year, its Managing Director, Mrs. Yinka Adekoya, said.

In a statement,  she said the result is from the Group’s Unaudited Financial Results for the period ended September 30, 2019.

She said the growth was driven by the company’s sustained leadership status in some major accounts, attainment of increased market shares and enhanced underwriting capabilities.

She disclosed that the firm recorded 26 per cent YoY increase in gross written premiums for the period.

According to her, the growth in premiums and decrease in net claims expense during the period under review had a positive impact on this position.

She said: “The cost optimisation measures put in place continued to pay off as operating expenses dropped by 8 per cent to N3.2 billion year on year, compared to the prior period’s position of N3.5 billion. There was a notable growth in profit before tax for the period at 129 per cent to close at N1.1 billion compared to the N475 million in the same period of 2018.

“Wapic Life Assurance wrote N2.1 billion in gross written premium within the nine months period, a 36 per cent YoY growth in premium performance compared to the 2018 position of N1.52 billion. Net claims expenses declined by 22 per cent to N778 million within the nine-month period compared to the corresponding year’s position of N995 million.

CONSOLIDATED Hallmark Insurance Plc has posted a Profit-After-Tax (PAT) of N519.6 million in its third quarter 2019 results, as against the N355.9 million recorded in the corresponding period of 2018, representing a 46 per cent rise.

This was contained in its Group Unaudited Financial Results for the period ended September 30, 2019 presented to shareholders at the Nigerian Stock Exchange.

The company’s Gross Premium Written for the period grew by 23.7 per cent to N6.687 billion from N5.404 billion reported in September 2018. Also, Total Assets of the Group rose to N11.159 billion from N10.821 billion during the corresponding period.

Commenting on the financial result, the Managing Director of Consolidated Hallmark Insurance Plc, Mr. Eddie Efekoha, expressed delight with the company’s consistent impressive performance.

He said the unwavering support of the Board and Management of the company was pivotal to the success being recorded.

He said: “The strong performance reflects the Board and Management’s commitment towards rewarding our shareholders with good returns. There is no gainsaying that the consistent improvement is also being driven by the increased confidence by our customers.”

 

INSURANCE companies need to reorganise their operations and focus on promoting value to deepen penetration, the President Chartered Insurance Institute of Nigeria (CIIN), Eddie Efekoha has said.

He spoke during the opening of the Institute’s 2019 Annual Education Seminar with theme: “Financial Inclusion and Insurance – Issues, Challenges and opportunities” in Enugu State.

Efekoha who is also the Managing Director of Consolidated Hallmark Insurance Plc said the theme was specially selected to throw further light on the importance of inclusion, the roles of emerging markets and need for creativity in the offering of services by insurance stakeholders in order  to grow the insurance industry.

He stated that it is common knowledge that insurance penetration is nowhere near where it should be in the country.

He pointed out that as practitioners, they can also acknowledge that companies are doing all that they can within the law to reach out to customers in order to create a sustained demand for insurance products.

He said the question rather is whether the practitioners are putting in their best efforts and what more can be done to improve their lot.

He said: “Equally, insurance companies are being tasked to reorganise their operations and focus on promoting value. This will in turn increase the number of persons who embrace insurance, turning them into ambassadors no matter in what sector they actively function.

“This seminar theme beams a spotlight on financial inclusion as a major facilitator of the growth of the industry. Even the smallest molecule of our operations should be clear and concise to our target audience and our messages should reach them where ever they are.”

 

AXA Mansard, a member of AXA, has sponsored the third edition of 2019 Lagos Kids’ Mini Marathon.

The edition of the marathon which was hosted by the St. Saviours School, Ikoyi had: ‘Active Kids Rock’ as its theme, kicked off at 7:30 am after an early morning warm up exercise for the kids.

Its Head, Customer Engagement, Emeka Muonaka in a statement, stated that the company understood the importance of wellness and is committed to enshrining a culture of healthy living in communities.

According to him, supporting children to form the habit of keeping fit from a young age is one more way the firm performs its corporate social responsibility.`

He stressed that as a leading insurer, we will continue to take a leadership stance in the improvement of health in order to make a difference, noting that they remain resolute in making Nigeria and the world at large a healthier place.

He said there were various categories of the marathon for kids within various age bands. These include the 1.2 km walk for children between the ages of four and six, 1.2 km run for age’s seven to eight, 3 km run for ages nine and twelve, and finally, the 5 km run for ages thirteen to fifteen.

THE insurance industry need youths to further drive the technological growth within the industry, the President, Professional Insurance Ladies Association (PILA), Mrs Ose Oluyanwo has said.

She spoke at the 2019 PILA career talk for secondary school students in Lagos State, Institute of Advance Legal Studies, University of Lagos tagged: “Together We Can, The Youths and Insurance.”

She said the industry is looking at a new generation of insurance practitioners, who are poised to take the industry by storm bringing in to bear, their love and knowledge of technology, innovation and dedication.

She stated that this year’s theme is instructive, as the global market today is being driven by technology  to drive competitive advantage,  hinged on the youths, called millennials.

She said: “The PILA career talk is a programme with a strong responsibility to encourage and nurture students towards a career in insurance. We at PILA take it upon ourselves in conjunction with the Chartered Insurance Institute of Nigeria (CIIN) to encourage students to embrace insurance as a career.

“We have been complementing efforts in educating, guiding and attracting young career seekers into the insurance profession through our career talks for secondary schools; creating awareness for insurance at the microeconomic level of the nation through our Market Outreach Programme for Market Women; and upgrading and updating the competencies of our members through various manpower development programmes (education and training).”

The police officers who died while on active service between June 2019 till date have no insurance cover. This is due to the failure of the Federal Government to pay premium as at when due, Omobola Tolu-Kusimo writes.

 

THE no premium, no cover policy of the insurance industry and the continuous default in payment of insurance premiums by the Federal Government have left many of its deceased personnels’ beneficiaries with no compensation.

Presently, Nigeria police officers who died on duty from June 2019 till date have no insurance cover due to the non-payment of insurance premium on police officers by the Federal Government to insurance companies.

Going by the policy of no premium, no cover enforced by the National Insurance Commission (NAICOM), no insurance policy must be sold on credit.

A representative of the Nigeria Police Force Insurance Department, Deputy Commissioner of Police, Dr. A.M. Sulaiman revealed this during the 2019 Interactive Session with Major Consumers of Insurance Products organised by NAICOM in Lagos.

The DCP said the police have been having problem with paying premiums promptly due to budgetary delay and urged NAICOM to wave the no premium, no cover policy in the favour of Nigerian Armed Forces, due to the peculiar nature of their job.

NAICOM in 2013 enforced the ‘no premium, no cover’ policy on insurance accounts.

The Commission noted that all insurance covers shall only be provided on a strict ‘no premium, no cover’ basis. It maintained that only cover for which payment has been received directly by the insurer or indirectly through a duly licensed insurance broker shall be recognised as income in the books of the insurer.

NAICOM said any insurer who grants cover without having premium in advance or premium receipt notification from the relevant insurance broker shall be liable to a penalty of N500, 000 in respect of each cover so granted, and in addition, may be a ground for suspension of the license of the insurer.

It said irrespective of period of insurance, insurers shall ensure that at any point they have received directly or indirectly, through the insurance broker the full premium in advance for cover being granted. NAICOM noted that all brokers shal within 48 hours of receiving premiums on behalf of any insurer; notify the insurer in writing in each case of the receipt of such premium, adding that all such notification shall be accompanied by the broker’s credit notes, acknowledging indebtedness to the insurer. It maintained that upon the receipt of such credit notes, the insurer shall issue cover and forward the policy documents along with the related debt notes to the broker.

 

By Our Reporter

Despite the unfavourable economic weather in the sector, Anchor Insurance Company Limited has braced the odds to record a gross written premium of N3.4 billion at the close of business last year.

This represents 54.38 per cent growth over the performance of N2.2 billion in 2017 and the first of its kind, since the company was established in the past 30 years.

The company, during the meeting also ratified a dividend of 2 Kobo per ordinary shares to reward shareholders, promising to ensure a geometric improvement in the various relevant indices come 2019.

Chairman of the company, Dr. Elijah Akpan, at its 29th Annual General Meeting (AGM) at Ibom Le’ Meridien and Golf Resort, Uyo, the Akwa Ibom State capital reviewed that the company’s business performance in the outgone year.

Akpan attributed the successes to team work and determination of workers to change the age-long premium narrative, reviewing of marketing strategy by the new management, injection of fresh ideas and added efforts by the new hands that joined the system.

He said: “Anchor Insurance, in a bid to make a difference, also recorded positive headways to include net premium of N2.8billion against N2billion in 2017, showing 41.6 per cent improvement over the performance in the corresponding year, while investment and incomes hopped from N229.4million in 2017 to N244.9million in 2018, indicating 6.75 per cent rise over the performance in 2017.

“Profit before tax also rose to N220.2milion in 2018 from N180.3million in 2017, representing 22.12 per cent increase over 2017; profit after tax stood at 22.87 per cent from N133.3m in 2017 to N163.8milion in 2018, total assets experienced 5.37 per cent rise from N6.2bilion in 2017 to N6.6billion in 2018 and shareholders’ fund rose to N5.2billion in 2018 from N5.1billion, showing 1.67 per cent increase.”

The chairman maintained that propelled by the company’s pay-off -where insurance works, the company responded to claims request by paying N816.9 million to genuine claimants in 2018 against N540.2 million in 2017, indicating 51.2 per cent show of strength.

Airline operators, Nigeria Police Force, Manufacturers Association of Nigeria (MAN) and other insurance consumers have accused insurance operators of delayed claims and non-payment of claims in some cases. They have threatened to dump local insurers. OMOBOLA TOLU-KUSIMO reports.

The customer is king school of thinking and how to treat him has always formed a major discourse when analysing customer service. Besides, experts have said customers’ satisfaction is central to the sustainability and success of every business, insurance inclusive.

But consumers of insurance products have complained of operator’s poor customer service, mainly over delayed and non-payment of claims.

To ensure better delivery of quality services to policyholders, National Insurance Commssion (NAICOM) organised a forum for consumers.

The event tagged ‘’Interactive session with major consumers of insurance products’, which was ttended by airline operators, including Air Peace, Dana, SkyJet, as well as the Nigeria Police Force, Ministry of Defence, Federal Road Safety Commission (FRSC), and Manufacturers Association of Nigeria (MAN),which engaged the operators, accusing them of not paying genuine claims after collecting their premiums. They threatened to boycott operators and insure abroad where they were sure of getting value.

The operators blamed consumers who have encountered non-payment of claims, for not reading through policy documents to know the terms of conditions.

SkyJet Aviation Services Limited Chairman, Alhaji Kashim Shettima said insurance firms do not have the capacity to insure airlines.

Shettima, who is also a member of Airline Operators of Nigeria (AON), said it had become difficult getting insurance firms to pay claims.

He said: “I used to insure my aircraft and its maintenance with a broker in South Africa under the Lloyds of London and was paying foreign currencies. I did this because I was getting value but at some point I decided to obey the Local Content Act just to support my country by insuring with local operators. But now, I believe I made a mistake taking this step. I have four aircraft, which I insured with local insurers and use to pay $22,000 premium quarterly. Nigerian insurers got 85 percent of the business while 15 per cent was given to a foreign insurer. At present, I have a $700,000 claim and they do not want to pay me. They come up with different excuses not to pay.

“The broker even asked to get things sorted for me while I share claims with him. This is the kind of thing that is going on in the insurance industry and yet NAICOM is insisting that we must insure 70 per cent of our business in Nigeria. What is NAICOM doing to curtail the malpractice and lack of capacity of the insurance operators? Enough is enough and very soon, we will boycott local insurers, if they do not change and give us value for our money.”

The Managing Director, Air Peace Airline, Oluwatoyin Olajide, said insurance firms deliberately refuse to pay claims.

She cited a fire incident at the Air Peace warehouse in January 2017. “We had a fire incident at our maintenance and facilities at the local under writer here and filed for claims from the underwriters. They sent their loss adjusters to come and look at incident and evaluate how much claim was due to us. At the end, the claim was valued at $973, 291. This was done in June 2017 and we started following up with them for the payment. But we could only get $290,235.37 from the claim. For two years, we wrote to NAICOM, complaining about the non-payment of the remaining claim but got no response.

“We later got response from the lead underwriter who informed us that they couldn’t get their reinsurer to pay and so we the insured will have to wait. They made us to suffer and at the end we had to engage the services of a lawyer to assist us because after writing to NAICOM, we still didn’t get a favourable response. NAICOM even told us in one their responses that we should cooperatete and listen to the plea of the underwriter. After like over two years, the underwriters came to us for final settlement and offered to pay $478,138. So, this made Air Peace to take a loss of over $200,000. This is why I said it is really a challenge getting insurance companies to pay your claim when they need to.”

Nigeria Civil Aviation authority (NCAA) General Manager, Mrs Oyerinde M. O., said their position was that NIACOM and airline should rejig the NAICOM Act.

She noted that claims should be paid promptly, so that airlines could maintain their aircraft.

She disclosed that the airlines had written NCAA and they found out that there were a lot of issues and that it was on this ground that they wrote to NAICOM. ‘’We have also reported the issues at the ministerial level,’’ she said.

She, however, proposed that the NCAA, NAICOM, insurance companies and airline operators should come together and speak on the issues first to see, if they could be resolved.

The representative of the Federal Road Safety Corps (FRSC), Martha Eche, said the underwriters had not been paying death benefits promptly to the Next-of-Kin of deceased officers.

“We operate under the Office of Head of Service of the Federation and we have been on life insurance policy. The areas that bother us is the length of time it takes for claims to be paid. This is despite that it takes time for a next-of-kin who has lost loved ones to come forward. When they eventually come forward, the insurers will not want to pay their claims. At the end, we always bothered in the office by the NOKs,’’ she said.

NCRIB President, Mrs Bola Onigbogi, advised consumers to engage a broker to avoid having problems with their claims.

Acting Commissioner for Insurance, Olorundare Sunday Thomas, said: “Policyholders remain a key component of our primary constituency and, therefore, must ensure they are treated fairly and protected as enshrine in the relevant laws; while balancing the supervisory role of ensuring financial soundness and reliability of insurance institutions.

“Suffice it to say that consumers are faced with challenges that may vary from one individual or entity’s experience to another while the provider is faced with constraints that may also differ from one company to the other. But there are no doubt regular interactions such as this one will, among others, foster a better understanding and synergy that will result to better services to the consumer.

The President, Chartered Insurance Institute of Nigeria (CIIN), Eddie Efekoha, said debunked claims that underwriters do not pay genuine claims.

Efekoha, who is also the Managing Director of Consolidated Hallmark Insurance Plc, explained that the insured don’t understand the terms of their policies.

On insurers not having capacity, he said: “It is true you will say insurance companies in Nigeria are small companies and not capitalised but insurance is about spreading of risks. No country’s insurance industry has been able to insure his own risk 100 per cent. Even in the United Kingdom, British Airways is not insured 100 per cent in the country. Emirates is also not insured 100 per cent in the United Arab Emirates. The same applies to Nigeria.This is why we have the reinsurers and the retrocessionaire, meaning that you’re the insured, we are the insurers, there are reinsurers and then the retrocessionaire. So, the risk sharing goes on like that. I think we just need to understand how insurance operates.

“Just like the airlines are in business to make profit, insurance companies are in business to make profit. We have been using our capital to subsidise our clients’ claims because premiums are going down and claims are increasing, so, what do we do? It’s not your fault, it’s our fault because competition is forcing us to do so many things but as I said our consumers are kings and I believe we can resolve all these problems. NAICOM intervened on the issue between the market and Air Peace. Yes, they appointed a lawyer. But, honestly, we value the aviation clients. We are doing well. As I said in every relationship, there will be differences. How do we resolve the differences? I think that is what is important? If you say you don’t want to insure here at all, if NAICOM permits, no problem.

“I know that the Air Peace CEO has been rigidly conservative with the facts because we all know what happened. They left Nigeria and paid premium abroad and when the claims happened they wanted the insurance companies here to pay. NAICOM, as a regulator, is aware of the situation but I agree that we should have a close door and whatever is right we do it so that both parties and all parties can get their value. This will be my recommendation.”

 

After many years of bickering, insurance firms’shareholders and the National Insurance Commission (NAICOM) seem to have reconciled over recapitalisation of the industry, reports Omobola Tolu-Kusimo.

Shareholders have consistently  been at loggerheads with the National Insurance Commission (NAICOM). If the shareholders are not quarrelling over fines charged their companies for infringement, they are disagreeing over policies put in place by the regulator with the most recent on recapitalisation.

The shareholders have been at loggerheads with the Commission since it unveiled the recapitalisation plan for insurance companies. They were angry that the Commission increased the paid-up share capital of life companies from N2 billion to N8 billion; General Business from N3 billion to N10 billion; Composite Business from N5 billion to N18 billion; and Reinsurance Companies from N10 billion to N20 billion. The companies were given 13 months to comply, starting from May 20.

However, the regulator and shareholders seem to have reconciled after many years of bickering. The reconciliation took place during an interactive session organised by the regulator in Lagos.

The shareholders had criticised NAICOM for lack of awareness on policies introduced to operators and inconsiderateness but there was truce after the warring parties listened to each other.

National Coordinator, Independent Shareholders Association of Nigeria (ISAN), Adeniyi Adebisi, said having listened to the regulator during the forum, he believes it has good intention with the recapitalisation plan.

He urged NAICOM not be hostile and antagonistic in its regulatory approach, noting that the Commission should dialogue and create awareness about its policies.

He said: “The Commission should give time frame, dialogue, engage with all stakeholders and fashion out ways of addressing the problems of the industry.

“Before now, the Commission does not give us any opportunity to see reason for our agitations, yet they are regulating our companies. We should be able to understand what you are doing but no, you want to railroad us into what you are doing.

“I recall the recapitalisattion exercise carried out by Prof Charles Chukwuma Soludo. They got all the money but they didn’t know what to do with it.  Today, many insurance companies are trading below their authorised share capital and you are asking them to come and put more money.”

National President, Constance Shareholders Association, Mr Shehu Mikali, said the problem with the recapitalisation initiative was not from the  firms or their shareholders, but from the regulator.

“There is need for proper monitoring of the companies amongst the regulators, as this was affecting a lot of things which need to be addressed. The government should also put round pegs in round holes,” he said.

NAICOM Director, Policy and Regulation, Mr Agboola Pius, explained that the Commission was only trying to protect the interest of shareholders and policyholders, by ensuring that investors have value for their money.

He explained that the companies needed to increase retention capacity and conservation of foreign exchange earnings, adding that over 70 per cent of oil and gas business is ceded abroad due to lack of local capacity.

He staid insurance retention capacity is the maximum amount of risk retained by an insurer per cover.

He added that the capital size of an underwriter has significant impact on retention capacity, among other factors, noting that a large proportion of the local risks are presently ceded outside because of low retention capacity.

‘’High retention means more premium is retained by the company.   ‘’Tendency to improve corporate governance over-sight as a result of introduction of major new big owners to the industry. The higher the stakes in an enterprise, the higher the interest,’’ he said.

He stated further that when the operators recapitalise, there will be new knowledge, ideas and innovations to attract talented directors, enabling better strategic planning and cost of capital reduction. With proper oversights, it reduces pursuance of self-interest of managers at the expense of shareholders.

He said: “The value creation of a larger and bigger enterprise can be illustrated using the output of some companies that merged during 2005/2007 recapitalisation as stated in the next slides. The impact of banking recapitalisation of 2004 is also a case for consideration.

“There will also be increase in liquidity and investment funds and the companies will be able to meet current obligations as it falls due; availability of investment fund for a better/higher returns; added value to insurance services required higher and bigger capital outlay. The potential in Nigeria is very high and this required capital to explore and harness.’’

 

The proposed increase in the Value Added Tax (VAT) from five per cent to 7.5 per cent by the Federal Government and its resolve to commence implementation in 2020 after necessary consultations has been raising dust by many Nigerians.

A lot of Nigerians complained that the planned increment would cause inflation and further aggravate the hardship being experienced by the people.

Some experts believe the proposed upward review of VAT is the right step in the right direction owing to dwindling oil prices while others faulted the timing.

The Federal Government had explained in various fora that the proposed tax was not targetting the poor and the rural dwellers but the rich in urban areas with a view to getting more revenue to run the government.

VAT is a consumption tax levied on products at every point of sale where value has been added, starting from raw materials and going all the way to the final retail purchase.

Ultimately, the consumer pays the VAT, buyers at earlier stages of production receive reimbursements for the previous VAT they have paid.

A VAT system is often confused with a national sales tax. With a sales tax, the tax is only collected once at the final point of purchase by a consumer and so only the retail customer pays it.

The VAT system is invoice-based and collected at several points throughout an item’s production each time value is added and a sale is made.

Every seller in the production chain charges a VAT tax to the buyer, which it then remits to the government and the amount of tax levied at each point of sale along the chain is based on the value added by the latest seller.

In September, after the Federal Executive Council (FEC) meeting presided over by President Muhammadu Buhari, the Minister of Finance, Budget and National Planning, Mrs Zainab Ahmed announced plan by the Federal Government to raise VAT from five per cent to 7.5 per cent.

Ahmed had said that consultations would begin at all levels on the review of the VAT to 7.5 per cent, just as it was ready to begin deductions to recover bailout funds given to states.

“We will begin consultations and it will be at various levels in the country. Those to be consulted include the state governments,  the local governments, the parliament as well as the Nigerian public.

“For the VAT increase to take effect, there has to be an amendment to the VAT Act,” she said.

The finance minister also recently said the VAT increase would impact more on consumption by urban communities and the wealthier sections of the population. She explained that the proposed tax increase would not affect the poor masses as perceived by some people. “The proposed VAT increase is likely to impact more on consumption by the urban communities and the wealthier sections of the population than on the poor.’’

According to Ahmed, her ministry will coordinate its fiscal policies with the Central Bank of Nigeria (CBN)’s current tight monetary policy stance to ensure that the appropriate out turns are achieved in terms of growth, consumption and inflation.

She, however, said that Nigeria’s VAT contribution to the nation’s GDP had declined from one per cent between 2010 and 2013, to 0.8 per cent between 2015 and 2018.

“This is significantly below the median of five per cent of GDP in other comparable African countries.

“Nigeria’s low VAT-to-GDP is attributable to the low nominal VAT rate, which at five per cent is the lowest in the African region which averages at about 16 per cent.

“Furthermore, the efficiency of VAT collection at 0.2, is well below the African regional average of 0.33,’’ she explained.

Similarly, Mr Ben Akabueze, the Director-General, Budget Office of the Federation also said the proposed VAT would be implemented in threshold, adding that it would affect only certain category of businesses as some small businesses would be exempted.

Akabueze explained that the new VAT would not affect poor and vulnerable Nigerians contrary to perception in some quarters.

“The proposed VAT review has minimal engagement with the poor or common man because they hardly engage in platform where VAT is chargeable.

“In doing this, the new VAT will consider two things such as expansion of the exemption list and the threshold which considers the quantum of the capital of a particular business such with VAT registration to N25 million turnover per annum.

“The VAT has an exemption list as those selling basic commodities such as food, medical services and medicines as well as education and we have expanded it to cover as many basic things as possible” he explained.

The director-general said that VAT in Nigeria was still low considering the tax to Gross Domestic Product’s (GDP) ration which he said was about six per cent and the lowest in the world.

He added that Nigerians should not expect the government to perform optimally without increasing the revenue base.

According to him, 85 per cent of the total VAT goes to sub national governments while the remaining goes to the Federal Government.

Akabueze said the Federal Government was not pushing for increase to address its own problem but rather to ensure a vibrant economy.

In his reaction, Mr Godwin Emefiele, the Governor of Central Bank of Nigeria (CBN), said the plan to increase VAT from five per cent to 7.5 per cent was in the right direction to raise the country’s revenue.

Emefiele said the government had responsibility to fend for every Nigerian by providing basic infrastructure like roads, electricity and hospitals among others.

He explained that the government has only two ways to fund such projects, which are by raising revenue and through loan collection.

According to him, the present administration has been criticised by some people for high debt rate incurred.

“Government unfortunately has no option if it does not borrow, it must raise revenue and you all agree with me that it has obligations to meet up with.

”The increase of VAT to 7.5 per cent is low compared to other countries, in fact, with this increase, Nigeria has the lowest in the world.

“If the government can meet its obligations through this increment, it should be supported, I am therefore appealing to Nigerians to show understanding and support government’s policies,” he said.

Also reacting, Mr Akinsanya Niyi, a tax expert said he was in support of the upward review of VAT but the government should not be in a hurry to implement it due to obvious reasons.

Niyi said that the government should wait for the right time because the economy was just picking up and the standard of living was still low as well as high unemployment rate.

He said the new VAT might force a shift in consumption patterns which could affect consumption of some finished goods and production of such goods, thereby causing reduction of the work force.

According to him, VAT is an indirect tax charged by the service provider but being bore by the final consumers, its a stage by stage type of tax that is charged at a percentage of Value added.

The expert, however, tasked the management of the Federal Inland Revenue Service (FIRS) and other stakeholders in tax administration to sensitise the general public on what the proposed VAT was all about.

 

• Sumaila is of the News Agency of Nigeria (NAN).