The Bangladesh Insurance Association (BIA) yesterday demanded withdrawal of a 5 percent gains tax on bonuses given to policyholders against premiums.
The tax deterred people from taking up the policy, affecting the insurance industry, Sheikh Kabir Hossain, president of the BIA, told a press conference on the upcoming budget at the BIA headquarters in Dhaka.
Insurers said policyholders do not get much benefit against their deposits of premium, for which the imposition of the tax was illogical.
The association leaders have been seeking the withdrawal since its imposition in 2014.
Insurance companies do not offer attractive benefits to policyholders as the main objective of insurance is to give accident coverage, the association said in a statement.
The association also demanded a waiver of 15 percent source tax on agent commissions.
The agents are working as an arranger between insurance companies and clients, earning a certain percentage as commission over the collected premium, it said.
Agents have to pay a 5 percent income tax on the commission earnings and the imposition of the 15 percent source tax means that they are facing double taxation, the leaders explained.
The association also demanded giving a second thought to a 40 percent income tax on excess expenditure.
Companies have to face financial penalties from the regulatory authority if they exceed the annual expenditure limit. Moreover, they have to pay a 40 percent tax on the excess amount, meaning that the punishment has been doubled, the leaders claimed.