Philippine life insurance companies are seeking a reduction in the 5% premium tax to 3% - moderating their original position requesting the complete abolition of premium tax.
A proposal by the Philippine Life Insurance Association (PLIA) to amend the tax laws is being considered by the Insurance Commission, Department of Finance and Congress. Life insurers point out that the premium tax on life insurance policies is the only one of its kind in the Asia Pacific region.
Citing studies conducted by the industry, academy and the Finance Department, the PLIA notes that the premium tax covers both the savings and the investment income aspects of a life insurance policy. The studies stress that government should not tax savings but only the investment portion of the premium. “That can roughly be reflected in the 2% portion of the premium, not the entire 5%,” the PLIA said. The proposal would require an amendment to the tax code.
For more information please visit www.firstlife.com.ph
Citing studies conducted by the industry, academy and the Finance Department, the PLIA notes that the premium tax covers both the savings and the investment income aspects of a life insurance policy. The studies stress that government should not tax savings but only the investment portion of the premium. “That can roughly be reflected in the 2% portion of the premium, not the entire 5%,” the PLIA said. The proposal would require an amendment to the tax code.
For more information please visit www.firstlife.com.ph