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By Chino S. Leyco, Reporter
THE Bureau of Internal Revenue (BIR) said Friday
that it will no longer review for the third time a controversial
order imposing new taxes on insurers.
Commissioner Lilian Hefti said the agency’s
Revenue Memorandum Circular (RMC) 30-2008 is final and ready for
implementation.
The Philippine Insurers and Reinsurers
Association (PIRA) has been trying to convince the BIR to rethink
its position on the order, which introduces new taxes on the
industry and excludes business expenses from the list of tax
deductible items.
PIRA said the P15 documentary stamp tax that the
BIR is planning to impose on all certificates of insurance would
dampen “micro-insurance,” which is a low-cost insurance product
marketed to poor families.
PIRA, the umbrella organization of 92 non-life
insurance companies, said the idea of micro insurance is to extend
insurance cover to the poor.
“While we understand that the BIR intends to
discourage employers from using these certificates of insurance, we
feel the BIR should adopt a more pro-poor stand insofar as taxes on
insurance are concerned,” the group said.
In a meeting on August 4, the group pressed its
position on Hefti, who subsequently issued RMC 59-2008 to amend her
initial order.
The new order added commissions and other fees
to the list of expenses of insurance companies. It also corrected
the 12-percent value added tax on health and accident insurance,
pegging it at 5 percent and adjusted documentary stamp taxes on
health and life insurance.
In light of the BIR’s decision, PIRA warned
that some companies may have to increase their premiums on product
lines with high losses.
“This will mean the consumer will again have
to pay more. The timing is bad considering that all of us are
reeling from the increase in prices of basic commodities,” the
group said.
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