Likelihood of more calamities highlights need for coverage
By Michelle V. Remo
Philippine Daily Inquirer
8:53 am | Friday, January 24th, 2014
Pira president Emmanuel Que: More affordable products PHOTO FROM PIRAINC.ORG
MANILA, Philippines—The non-life insurance sector is calling for the rationalization of taxes imposed on its members, saying taxes have to be lowered to make surety products more accessible to Filipinos.
The Philippine Insurers and Reinsurers Association (Pira), the organization of non-life insurers in the country, said reduced taxes would lower the cost of insuring assets against losses from disasters.
Pira president Emmanuel Que said the likelihood of more natural disasters had made it vital to push for measures that would make insurance more popular among Filipinos.
“It is incumbent upon us to make our products more affordable to the public,” Que told reporters on Thursday.
Pira supports a bill recently filed in the House of Representatives seeking to make the taxes on non-life insurance companies similar to those imposed on life insurance firms.
In particular, the bill seeks to replace the 12-percent value-added tax (VAT) on non-life insurance with the 2-percent premium tax.
Moreover, it seeks to adjust the documentary stamp tax (DST) on non-life insurance from the current 12.5 percent of premiums to a graduated scale of up to P100 per insurance policy.
“We want to pattern our tax structure to that of life insurance. Life and non-life insurance companies are in the same business—insurance—and so Pira believes we should just have one tax structure,” Que said.
The call for reduced taxes for non-life insurers is backed by the Insurance Commission.
Insurance Commissioner Emmanuel Dooc said accessibility and affordability of non-life insurance products were necessary to protect Filipinos from losses due to disasters.
Dooc agreed that lowering the taxes on non-life insurance would prompt more Filipinos to buy surety products for their assets.
“Currently, it is not a priority among average households. Making it more affordable will help increase penetration of non-life insurance products,” he said in an earlier interview.
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Tags: non-life insurance , taxes
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