The Bureau of Internal Revenue (BIR) said its new rules on the insurance industry are already final and would no longer be changed.
This is despite appeals from the Philippine Insurers and Reinsurers Association (PIRA) which warned that its members may increase premiums if the BIR insists on imposing new taxes on the insurance industry.
“It’s final,” Internal Revenue commissioner Lilian Hefti said.
Hefti said the agency had consulted with the insurance groups before coming out with the ruling.
However, PIRA had warned that due to additional taxes, 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.
The BIR issued Revenue Memorandum Circular (RMC) 30-2008 which introduces new taxes on the industry and excludes business expenses from the list of tax deductibles.
Earlier, PIRA said the BIR’s move would affect micro insurance companies or those low-cost insurance that is marketed to poor families. In its statement, PIRA noted that the P15 documentary stamp tax that the BIR is planning to impose on all certificates of insurance would have a great effect on “micro insurance.”
The umbrella organization of 92 non-life insurance companies, explained that the idea of micro insurance is to extend insurance cover to the poor and marginalized segments of the population.
“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 has said.