Efforts of insurance industry activists to remove value added tax

The efforts of insurance industry activists to remove #value_added_tax

World Economy: According to the Chairman of the Parliament’s Economic Commission, the review of the bill to amend the value added tax law will pass its final days in this commission and then go to the public forum. One of the amendments that was criticized from the beginning of the approval and notification of this law was “tax payment by commercial insurance customers”. In this law, insurers were also required to pay value added tax like other consumers.

From the beginning, the commercial insurance industry protested, “Insurance services should not be taxed. For the development of insurance in Iran, concessions should be considered instead of taxing it. “Insurance is also a part of the financial market and it should be exempt from taxes like banks” and other cases were raised in protest against this inclusion. But the country’s fiscal affairs organization, in response to these protests, raised this question: “Why didn’t anyone from the insurance companies come and say anything during the drafting of the law?”

Of course, commercial insurance companies did not sit idly by and tried to convince the tax authorities. The result of this effort was the exemption of part of the insurance services in two stages. First, the life insurance savings section, which was similar to bank savings, was exempted from value added tax, and then with the entry of the Administrative Court of Justice, medical insurances were also exempted, but other fields are still subject to taxation.

Now is the time to amend the value added tax law and the government has presented the amended clauses to the parliament for consideration, which happens to be a clause related to commercial insurance, but the insurers also have suggestions in this matter which they announced in the roundtable.

It was said in the insurance and tax panel: “Taxes are a part of the government’s income, and it seems unlikely that a representative of the government in the present parliament will defend the tax exemption of insurance companies, which happen to be good taxpayers, so who from the government in the commission “Economy of the Parliament defends the amendments, it is important.”

In this round table, it was also stated: “How are insurance services taxed in a country whose insurers are criticized for low insurance penetration?” It was also said: “The philosophy of commercial insurance is that people participate in compensating each other’s losses. In fact, by aggregating insurance premiums with the insurer, the loss is paid. The value added tax from this operation means that the government clearly says to calculate my share of 9 percent before compensating for damages.

Another obvious point of this round table is “the government’s lack of attention to the discussion of fees in the commercial insurance industry.” Because in the proposed bill, the government has mentioned only direct and indirect insurances that are exempt from tax at the time of issuing the insurance policy; However, there is no mention of the representatives’ fees and reliance fees.

This round table was organized with the coordination of Mr. Malekian, financial expert of Entrepreneur Insurance. Abdul Mahmoud Zarrabi, CEO, Gholam Ali Gholami, Vice President, Ali Reza Hojjati, member of the board of directors of Entrepreneur Insurance, along with Masoum Zamiri, CEO of Pasargad Insurance, and Seyed Mohammad Asoudeh, CEO of Iranian Reinsurance, formed the panel members.

Why was insurance not exempted from value added tax?
Waiver of agents’ fees; New offer
The effect of tax exemption from insurance
Hope for exemption
and

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This post is written by Modireat