The organization of the private insurance companies placed a five-point charter of demands ahead of the placement of the budget for FY2018-19 in parliament
Bangladesh Insurance Association (BIA) has urged the government not to impose a 15% value added tax (VAT) on the commission earnings of insurance company agents on top of a 5% income tax they already pay.
“Imposing 15% VAT on the agents’ earnings will severely worsen their livelihood,” BIA President Sheikh Kabir Hossain said at a pre-budget press briefing at the BIA headquarters in Dhaka on Monday.
At the briefing, the organization of the private insurance companies placed a five-point charter of demands ahead of the placement of the budget for FY2018-19 in parliament.
They want withdrawal of the 5% gain tax on deposit holder's profit, 15% VAT on agents’ commission, 15% source tax on commission of insurance agents, and income tax on excess management expenses, and reduction of corporate tax on insurance companies from existing 40%.
The budget session of the 10th parliament will begin on June 5.
Kabir Hossain said: “Forty percent corporate tax has illogically been imposed on insurance companies even though they are not comparable with banks and other financial companies in terms of profit generation.”
Insurance company owners say the National Board of Revenue has called for depositing 15% VAT on their agents’ commission and submit it to the Treasury through the relevant VAT office.
They say as a result of this the agents’ livelihood and the country's insurance industry would be severely harmed and the development of the industry would be hampered.
The BIA president said: “The sales of life insurance policies have been on the decline since 2014 when the government imposed 5% gain tax on policy benefits as policyholders prefer depositing funds into banks rather than purchasing life insurance policy.”
“Unless the tax provision is scraped, survival of the life insurance companies will be at stake,” he added.
BIA First Vice-President Prof Rubina Hamid, Vice-President AKM Monirul Hoque and Executive member Mozaffar Hossain Paltu, among others, were also present at Monday’s briefing.