The life insurers will re-file with the Senate and the House of Representatives a bill seeking to abolish the five-percent premium tax and another bill seeking to correct the application of the documentary stamp tax (DST).
On the other hand, the pre-need industry will re-file their bill seeking to "formalize or legitimize" their existence.
Victor P. Quisumbing, president of the Philippine Life Insurance Association (PLIA) said that the country is the only state in the world to slap tax on savings. The five-percent premium tax on life insurance policies in effect is a disincentive.
Quisumbing, who is also the president and chief executive officer of the Philippine Axa Life Insurance Corp. (PhilAxa Life), admitted that it would again be an almost impossible feat to get Congress to pass the bill into law taking in consideration the dire state of revenue collection.
"But we can not do anything but re-file the bill and fight. It is the only way to show government how serious we are and how important it is not to tax savings and individual protection," he stressed.
It is the nth time that the industry sought the abolition the five-percent premium tax. From the administration of former President Corazon C. Aquino, the bill had been filed and refiled. On several occasions, it passed the committee levels of both chamber of Congress but never reached the bicameral stage.
The insurers may also be forces to file a separate bill seeking to correct the application of the DST. The original practice is a one-time payment of the DST on premiums paid.
Based on the recently passed law on taxes, the DST will be slapped every time the policyholder pays premiums, which could range from monthly, quarterly, semi-annually or annually. – TPT