Bill seeks to collect 2% tax on nonlife insurance premiums
By Beatriz Marie D. Cruz, Reporter
A CONGRESSMAN has filed a bill seeking to collect a 2% tax on non-life insurance premiums.
“This proposed legislation aims to rationalize the non-life insurance industry’s tax burden, consistent with the overall direction of the government towards capital market efficiency,” House Ways and Means Chairman and Albay Rep. Jose Ma. Clemente “Joey” S. Salceda said in the bill’s explanatory note.
The proposed law seeks to “collect from every person, company and corporation (except purely cooperative companies and associations) doing non-life and life insurance business of any sort in the Philippines a tax of 2% of the total premium collected.”
House Bill No. 9269 seeks to amend Section 123 of the National Internal Revenue Code (NIRC), which only collects tax on life insurance premiums.
The bill also seeks to impose a one-time documentary tax stamp for insurance policies exceeding P100,000, starting at P20 if the amount of insurance is no more than P300,000.
The graded cost of the documentary stamp are as follows: P50 if the amount of insurance is over P300,000 but no more than P500,000; P100 for policies P500,000 – P750,000; P150 for P750,000 – P1million; and P200 for all insurance worth over P1 million.
No tax stamp will be imposed on insurance amounting lower than P100,000.
The proposed measure also seeks to impose a one-time documentary tax stamp on fidelity bonds and other insurance policies.
“Taxing insurance based on the coverage presupposes risk calculations of the private sector, and thus allows for some equalization based on risks and income,” Mr. Salceda said.
