MICROCAPITAL BRIEF: Microinsurance Companies in the Philippines Request Tax Exemption

The Visayan Daily Star, an online newspaper, recently reported that microinsurance companies in the Philippines are lobbying the national government to exempt microinsurance from taxes [1]. The companies made the appeal during a recent symposium on the state of microinsurance in the country. According to Mr Jhun Benedicto, chairman of Philippine Insurers and Reinsurers Association, “As of now, the taxes on non-life insurance policies include the 12.5 percent documentary stamp, 12 percent EVAT [Expanded Value Added Tax], 0.5 percent local government tax, [and] 2 percent fire service tax (for fire policies).” Mr Benedicto argues that the tax exemption would significantly reduce the cost of microinsurance thus encouraging its uptake by poor people. According to the Insurance Commission of the Philippines, an organization that is mandated to regulate and supervise the country’s insurance industry, 13 percent of the population was covered by insurance in 2009 and it expects 20 percent of the population to be insured by the end of 2011 [2].

By Jacqueline Foelster, Research Associate

Source and Additional Resources:

[1] The Visayan Daily Star, “Tax exemption urged for microinsurance”, http://www.visayandailystar.com/2011/May/20/businessnews4.htm

[2] MicroCapital.org Brief, April 28, 2011, “Insurance Commission of the Philippines Expects 20% of Population to be Insured by End of 2011”, https://www.microcapital.org/microcapital-brief-insurance-commission-of-the-philippines-expects-20-of-population-to-be-insured-by-end-of-2011/

MicroCapital.org Brief, March 30, 2011, “Bangko Sentral ng Pilipinas (BSP) to Allow Only ‘Trained and Documented’ Financial Institutions to Offer Microinsurance in the Philippines”, https://www.microcapital.org/microcapital-brief-bangko-sentral-ng-pilipinas-bsp-to-allow-only-%E2%80%9Ctrained-and-documented%E2%80%9D-financial-institutions-to-offer-microinsurance-in-the-philippines/

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