MANILA, Philippines–The non-life insurance sector is pushing for lower taxes to make industry players better equipped to face the challenges to be presented by the Asean economic integration going into full swing by yearend.
In a speech at a Financial Executives Institute of the Philippines forum on Wednesday, Philippine Insurers and Reinsurers Association (Pira) head Michael F. Rellosa said the group was “lobbying for lower taxes” to “level the playing field” vis-à-vis their Asean peers.
“We in the insurance industry in the Philippines pay a whopping 27.5 percent in various taxes from every insurance product that we sell. This is on top of our income taxes, which make insurance expensive in the Philippines,” Rellosa noted.
“If we are to compete with our counterparts in Asean, we need to lower this tax burden to around 5 percent,” he added.
Non-life insurance policies are currently being slapped a number of taxes, such as 12.5-percent documentary stamp tax, 2-percent fire service tax, and up to 0.75-percent local government tax.
Non-life insurance transactions are also subject to a 12-percent value-added tax (VAT), whereas the tax rate for life insurance premiums had already been reduced to only 2 percent.
In comparison, the VAT rate on insurance policies in Singapore is just 7 percent.