BIA for withdrawal of 5.0pc gain tax

Bangladesh Insurance Association (BIA) has demanded withdrawal of recently imposed 5.0 per cent gain tax on profits of deposit holders of the country’s life insurance companies in the upcoming national budget.
A delegation of the BIA made the demand in a set of proposals placed to the National Board of Revenue (NBR) Monday for inclusion in the national budget 2015-16, Enamul Haque Khan, deputy secretary of BIA, told the FE.
The association said that the gain tax, imposed last year, has already caused notable decrease in number of deposit policy holders in the life insurance sector.
Normally, interest rate on the deposit premium is much lower than that in the banks as the insurance bear risk, encouraging the people to deposit their money in banks, it said.
In such a situation, if the gain tax is now withdrawal, country’s life insurance business will be facing music like the year 2014, leaving the companies in trouble to keep on their insurance services and the small policy holders deprived, as per the nine-point proposal.
The BIA also proposed to set the tax-free commission limit of the insurance agents at Tk 2,20,000 like the individual assessees instead of the present 5.0 per cent tax at source against any amount of their insurance commission more than Tk 1.0.
The provision was incorporated in the fiscal year (FY) 2010-11, it said.
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