Insurers seek 5% gain tax waiver

The Bangladesh Insurance Association (BIA) has demanded withdrawal of 5 per cent gain tax on the profit of life insurance policyholders in the national budget for Fiscal Year 2022-23.

At the same time, it has demanded reduction in corporate tax for non-insurance companies.

BIA president Sheikh Kabir Hossain made the demand at a pre-budget discussion held at the National Board of Revenue (NBR) headquarters in Dhaka on Tuesday.

NBR member (Customs) Md Masud Sadik presided over the event.

On the day, leaders and representatives from the Dhaka Stock Exchange (DSE), Chittagong Stock Exchange (CSE), BMBA, and Bangladesh Insurance Association came up with their demand at the pre-budget meeting. In the discussion BIA president Sheikh Kabir Hossain said the imposition of 5 per cent gain tax on the profit of policyholders of all life insurance companies as per the Income Tax Ordinance 2014 has decreased the number of policy sales in all life insurance companies.

“On the other hand, the life insurance business is also declining. As a result, it will be costly for companies to survive in the future,” added Kabir.

Demanding a reduction in corporate tax, he said despite the fact that the income of banking companies is much higher than that of insurance companies, the tax rate on insurance companies is the same as that of bank companies which is never reasonable.

“Therefore, I demand that the tax rate of insurance company should not be equal to that of the bank company. It should be 35 per cent for non-life insurance companies and 30 per cent for life-insurance companies.”

Regarding the suspension of tax on health insurance, he maintained that under the existing insurance law in the country, no VAT has to be paid on the premium of life insurance policy, but if a policyholder buys a health insurance policy with life insurance, he has to pay 15 per cent VAT on the premium.

“As a result, consumers lose interest in health insurance. Therefore, the tax on this policy has to be suspended for the expansion of health insurance,” suggested Kabir.