Nonlife insurers still pushing for lower taxes
The local nonlife insurance industry will continue to push for tax cuts in a bid to make protection plans more affordable for Filipinos, especially those in areas frequently hit by natural disasters amid increasing climate change risks.
Speaking to reporters on Thursday, officials of the Philippine Insurers and Reinsurers Association (Pira) said they are in talks with the Department of Finance (DOF) to revisit long-standing proposals to reduce certain taxes on protection plans.
This has been a campaign that spans many Philippine presidents already, as the need to raise revenues to narrow fiscal deficits leave the proposal languishing in the legislative mill.
The umbrella organization said the combined tax rates on nonlife insurance products could go as high as over 27 percent, while the tax rate for life insurance premiums had already been reduced to only 2 percent.
Pira general manager Rogelio Concepcion said the industry and the DOF under the Marcos administration have already agreed on certain tax cuts in the proposed bill called “Passive Income and Financial Intermediary Taxation Act” or Pifita.
‘Refined’
But Concepcion said Pira could no longer track the proposed tax reductions since the DOF had amended Pifita, which was “refined” to rake in P300 billion in additional receipts over the next five years from its previous revenue-eroding form.
Nonlife insurance policies are currently being slapped with several taxes, such as a 12.5-percent documentary stamp tax, 2-percent fire service tax and up to 0.75-percent local government tax.
Nonlife insurance transactions are also subject to a 12-percent value-added tax.
