MICROCAPITAL BRIEF: Brazil’s Lower House of Congress Passes 1% Tax on Microinsurance

The lower house of the National Congress of Brazil recently approved a new financial operations tax for microinsurance companies of approximately one percent on the sale of microinsurance. Companies that provide microinsurance for their employees reportedly will be able to deduct the extra cost from their corporate income and social contribution taxes. Microinsurers would also be eligible for a new “special tax regime” to unify the payment of four taxes, including corporate income and various forms of social contributions taxes, at a lower combined rate of one percent. Nonetheless, the legislation still needs to be passed by the upper house in order to become law [1]. The upper house has not yet decided when the act will be reviewed.

As of October 2012, the microinsurance industry in Brazil is worth an estimated BRL 6 billion (USD 2.95 billion) and covers approximately 100 million people [2].

By Michael Averell, Research Associate

Sources and Additional Resources

[1] Business News Americas (BN Americas): “Microinsurance tax regime approved by Brazil’s lower house,” http://www.bnamericas.com/news/insurance/microinsurance-tax-regime-approved-by-brazils-lower-house

[2] Latin America Insurance Review: “Independence and the middle classes,” http://www.insurancelatam.com/independence-and-the-middle-classes/

MicroCapital story, May 23, 2012, “MICROFINANCE PUBLICATION ROUND-UP: Microfinance Information Exchange Diamond Rating System; Savings Linked Microinsurance in India; Banking Correspondents in Brazil,” https://www.microcapital.org/microfinance-publication-round-up-microfinance-information-exchange-diamond-rating-system-savings-linked-microinsurance-in-india-banking-correspondents-in-brazil/

MicroCapital story, April 20, 2012, “MICROCAPITAL BRIEF: TIM Participacoes Launches Microinsurance Through Text Messages in Brazil,” https://www.microcapital.org/microcapital-brief-tim-participacoes-launches-microinsurance-through-text-messages-in-brazil/

MicroCapital story, January 12, 2012, “MICROCAPITAL BRIEF: Insurer Mongeral Aegon, Microfinance Institution Finsol Team Up to Sell Microinsurance in Brazil,” https://www.microcapital.org/microcapital-brief-insurer-mongeral-aegon-microfinance-institution-finsol-team-up-to-sell-microinsurance-in-brazil/

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