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Tax take from insurance industry up 12%

Taxes collected from operations of insurance companies rose 12 percent year-on-year in 2015, Insurance Commission data showed.

In a report Tuesday, the agency said tax collections from life and non-life insurance companies amounted to P19.38 billion last year, up from 2014’s P17.21 billion.

The increase was attributed to collections of documentary stamp tax, value-added tax VAT and other taxes.

Total DST collections last year rose 4.18 percent to P5.86 billion from P5.63 billion in 2014.

VAT collections from the sector amounted to P6.32 billion in 2015, up by 32.34 percent from P4.77 billion in the previous year.
   
The IC explained that “non-life insurance policies are subject to DST at a rate of 12.5 percent or P0.50 on every P4.00, or a fractional part thereof, of the amount of premium charged, while premiums collected on these policies are generally subject to 12 percent VAT.”
   
Collections of premium tax in 2015 reached P957.3 million, 9.66 percent higher than year-ago’s P872.95 million.
   
On the other hand, revenue collections from withholding taxes declined by 1.76 percent to P3.29 billion from 2014’s P3.23 billion.
   
The increase in tax collections from the insurance industry was attributed to higher premium collections of  P854.97 million for 2015 from P777.69 million in 2014.
   
Insurance Commissioner Emmanuel F. Dooc cited that “truly, the increase in tax payments arising from the insurance business is not only a reflection of development of the local insurance market, but also a manifestation of how the insurance industry and insuring public exercise their responsibilities to the country as taxpayers.”
   
Dooc remains optimistic on the sustained rise of tax collections from the industry as companies continue to innovate their products to address specific needs of the people.
   
He said the microinsurance sector would also greatly boost tax revenues.