Insurers demand tax waiver from premium income
Friday, 13 May 2011
Asaduzzaman Pallab
Bangladesh Insurance Association (BIA) has demanded complete tax waiver from the premium income in the Initial Public Offering (IPO) of a listed company. At present there is 3.0 per cent tax imposed on the difference of the face value and offer price of IPO of a company. In its budget proposal for the 2011-2012 financial year to be placed before the National Board of Revenue (NBR) on May 15, the BIA mentioned that there is no such tax imposed in the USA and European Union countries. The BIA also mentioned that at present 5.0 per cent tax is imposed for transfer of shares of the sponsor shareholders of a company and proposed that there should be no tax imposed in such cases. At present the corporate tax rate for insurance companies is 42.5 per cent and the BIA has proposed the income tax for non-life insurance companies at the rate of 32.5 per cent and for life insurance at 15 per cent. A company has to pay 10 per cent tax for capital gain from the sale of shares and the BIA has proposed that the tax rate should be slashed to 5.0 per cent in case of capital gain from the capital market. In the budget proposal the BIA has mentioned that at present the highest rate of tax for an individual is 25 per cent. This high rate discourages many individuals to disclose their real income. Thus the BIA has proposed to fix the highest individual tax rate at 20 per cent in order to encourage individuals to declare their real income. At present the limit of tax-free income is Tk 165,000 for individuals. But an insurance agent has to pay tax for any amount of income. So the BIA has proposed to consider the income of an insurance agent like that of other individuals. There are 1.2 million insurance agents in the country.
Bangladesh Insurance Association (BIA) has demanded complete tax waiver from the premium income in the Initial Public Offering (IPO) of a listed company. At present there is 3.0 per cent tax imposed on the difference of the face value and offer price of IPO of a company. In its budget proposal for the 2011-2012 financial year to be placed before the National Board of Revenue (NBR) on May 15, the BIA mentioned that there is no such tax imposed in the USA and European Union countries. The BIA also mentioned that at present 5.0 per cent tax is imposed for transfer of shares of the sponsor shareholders of a company and proposed that there should be no tax imposed in such cases. At present the corporate tax rate for insurance companies is 42.5 per cent and the BIA has proposed the income tax for non-life insurance companies at the rate of 32.5 per cent and for life insurance at 15 per cent. A company has to pay 10 per cent tax for capital gain from the sale of shares and the BIA has proposed that the tax rate should be slashed to 5.0 per cent in case of capital gain from the capital market. In the budget proposal the BIA has mentioned that at present the highest rate of tax for an individual is 25 per cent. This high rate discourages many individuals to disclose their real income. Thus the BIA has proposed to fix the highest individual tax rate at 20 per cent in order to encourage individuals to declare their real income. At present the limit of tax-free income is Tk 165,000 for individuals. But an insurance agent has to pay tax for any amount of income. So the BIA has proposed to consider the income of an insurance agent like that of other individuals. There are 1.2 million insurance agents in the country.