Insurance Taxes Stunt Industry Growth
Byline: FIL C. SIONIL
High cost of premium payment due to various taxes on insurance products are impediments to the further growth of insurance business in the country, which, in turn, impact on the medium term objective of the Insurance Commission for, at least, 20 percent of the population to have insurance protection.
Philippine American Life and General Insurance Corp. (Philamlife) President and Chief Executive Officer Jose L. Cuisia believed the insurance climate, at present, must improve to be able to attain this.
"But we are urging the Insurance Commission to help create, directly or indirectly, a favorable environment to achieve it," Cuisia told reporters during the formal launching of an agreement between the insurer and the Department of Education, Culture and Sports (DECS).
Cuisia said the different taxes slapped on insurance products make it unattractive to investors or clients, adding that these have stunted the growth of insurance protection in the country.
Taxes include the fivepercent premiums tax, the documentary stamp tax (DST), the corporate income tax, the fire protection tax, the municipal tax among others.
Aside from this, the market conditions such as interest rates, high inflation rate affect the industry, in terms of its ability to earn substantial return for its long-term funds to pay-off future benefits.
Certain restrictions on the allowable instruments insurance players can hold, also, influence their earning capacity.
Insurance players have been seeking regulators to allow them more leeway in managing as well as in their investment strategy to be able to earn more profits for their long-term funds. …