BIR stands pat on insurance tax decision
By Michelle Remo
Philippine Daily Inquirer
First Posted 03:49:00 09/06/2008
MANILA, Philippines—The Bureau of Internal Revenue (BIR) has turned down a request of the insurance industry to amend a circular that requires insurance companies to pay an additional tax, BIR Commissioner Lilian Hefti said.
“The bureau already amended some of [the circular’s] provisions,” Hefti told reporters. “The latest version is already final, and we will no longer change it further.”
Under Revenue Memorandum Circular No. 59-2008, insurance companies should pay P15 worth of documentary stamp tax (DST) on each certificate of insurance issued. This is on top of the DST on premium collection imposed on insurance firms.
RMC 59-2008 is an amended version of RMC 30-2008, which imposed on health and accident insurance the 12 percent value-added tax apart from a DST of P15 per certificate of insurance issued.
Life and non-life insurance companies opposed the circular and complained to the Department of Finance and the Insurance Commission.
Insurance companies said imposing DST on certificates was tantamount to double taxation because the same tax is also applied to the premium collection. They said the tax would force some of them to raise the amount of premium collected from clients.
The finance department asked the BIR and the insurance industry to come up with a compromise.
The BIR subsequently issued the amending circular but retained the provision that requires the payment of P15 DST on certificates of insurance. Edited by INQUIRER.net
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