Lower corporate tax, lift gain tax on life policy bonus

Pre-budget proposals of BIA

FE Report | May 22, 2018 00:00:00

Bangladesh Insurance Association (BIA) President Sheikh Kabir Hossain addressing a Pre-Budget Discussion 2018-19 at BIA conference room in the city on Monday while First Vice-President Prof Rubina Hamid, Vice-President AKM Monirul Haque and executive committee members were present

Insurance companies have suggested lowering the corporate tax, lifting the 5.0 per cent gain tax on life policy bonus and withdrawing 15 per cent source tax against agents' commission.

The Bangladesh Insurance Association (BIA) came up with the proposals for the upcoming budget at a press conference at its headquarters in the city on Monday.

The association also urged the government to amend several clauses of the laws concerning the insurance sector and income tax to help the sector flourish.

BIA president Sheikh Kabir Hossain, its first vice president Prof Rubina Hamid and members Mozaffar Hossain Paltu, AKM Monirul Hoque and Monzurur Rahman were present at the press conference.

Kabir Hossain said insurance is one of the crucial sectors of an economy, but it could not be developed to the desired level despite sincere efforts by the government agencies concerned.

The insurance sector is making a remarkable contribution to the national economy by creating employment opportunities, making investments and providing huge revenue to the national exchequer, he said.

However, the sector is facing various setbacks due to inadequate policy support, he added.

He also said the source tax against insurance agents' commission imposed by the National Board of Revenue (NBR) would seriously impede the sector's growth.

Mentioning that the insurance policy is not consistent with the income tax policy, he said imposing VAT on agents' commission is not rational, as this kind of tax is generally imposed on final products or services.

Also, VAT should not be imposed on re-insurance commission, as the government receives tax from an insurance company whenever it collects premium from the clients, he added.

The BIA leaders said the listed public limited companies pay corporate tax at the rate of 25 per cent to the government, but insurance companies pay the tax at a much higher rate of 40 per cent.

They urged the government to reduce the rate below 25 per cent.

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