Insurance body wants cut in taxes on nonlife insurance
The Insurance Commission has reiterated its support for the reduction of taxes on nonlife insurance, saying that nonlife insurance should be made affordable to average Filipinos.
Insurance Commissioner Emmanuel Dooc, who has been reappointed earlier this month to a fixed six-year term, said the IC wanted the tax structure for the nonlife insurance sector be made similar to that for the life insurance sector.
The cut in taxes on life insurance in 2010 is credited for helping increase the penetration of life insurance products in the country.
Dooc said the disparity between the taxes on life and nonlife insurance was quite significant. He said this was dragging efforts to promote the value of insuring properties among average Filipinos.
“We want this proposal to be legislated soon so that we can lower the cost of non-life insurance and increase its market penetration,” Dooc told the Inquirer.
Dooc said taxes on nonlife insurance accounted for nearly 27 percent of premium, which included the 12-percent value-added tax, the 12.5-percent documentary stamp tax (DST) and an additional 2-percent tax for policies that include fire insurance coverage.
Life insurance, he said, was slapped with only a premium tax of 2 percent and a DST, up to a maximum of P100.
Dooc said a bill seeking to rationalize the tax structure for nonlife insurance has been pending in Congress. He said the IC hoped that latest developments would prompt legislators to act swiftly on the bill this time.
Dooc said the two latest disasters that hit the country—the 7.2 magnitude earthquake in Cebu and Bohol in October and Supertyphoon “Yolanda” that hit the Visayas last month—stressed the need to aggressively promote not only life but also nonlife insurance to Filipinos.
In the meantime, Dooc said representatives from life and nonlife insurance industries last Saturday set up a claims processing center in Tacloban City. It is meant to make it easier for calamity victims to file claims for insurance benefits.
Dooc said about P211 million worth of insurance benefit claims related to the supertyhoon had been paid as of last week.
With the claims processing center in Tacloban, he said, insurance companies were expecting applications for insurance benefit claims to spike in the coming weeks.
Dooc, who was appointed to head the IC two years ago, is the first to be named head of the Insurance Commission under the amended Insurance Code.
