Bangladesh Insurance Association (BIA) has demanded withdrawal of VAT on commissions of insurance agents in the next budget for the expansion of insurance industry.
"There is 15 per cent VAT at source on agent commission that has been affecting the insurance industry . . . this VAT should be withdrawn for the expansion of insurance business," said BIA president Sheikh Kabir Hossain at a press conference in Dhaka on Monday.
He said the commission agents get from insurance companies is their income and they pay five per cent tax on it. But if 15 per cent VAT is imposed on their income again it is equivalent to double tax, he added.
Hossain also said all listed companies are paying corporate tax at a rate of 25 per cent but the listed insurance companies are paying corporate tax at a rate of 40 per cent, reports BSS.
He demanded reduction of the corporate tax for the listed insurance companies as well.
Terming the imposition of VAT on the premium of re-insurance as illogical, he said insurance companies collect 15 per cent VAT while receive premium from clients and deposit it in the government exchequer and a part of this premium is given to the re-insurers.
So, there is no scope to impose VAT on the premium of re-insurance, he added.
He also demanded withdrawal of five per cent gain tax from the policy bonus of life insurance policy-holders.
BIA vice-president Dr Rubina Hamid and BIA leaders Monirul Haque, Mozaffar Hossain Paltu and Manzur Alam, among others, were present at the press conference.