The Bangladesh Insurance Association (BIA) has again demanded the withdrawal of a 5% gains tax on bonuses given to policyholders.
The tax deters people from buying the policy, hitting the insurance industry, Mr Sheikh Kabir Hossain, president of the BIA, said at a pre-Budget media conference.
The association's leaders have been seeking the withdrawal of the tax since its imposition in 2014, reports The Daily Star.
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 BIA has also demanded the withdrawal of a 15% VAT on insurance agents' commission.
“There is a 15% VAT at source on agent commission that has been affecting the insurance industry . . . this VAT should be withdrawn for the expansion of insurance business,” said Mr Hossain. Agents already pay a 5% tax on the commission.
Mr Hossain also said all listed companies are paying corporate tax at a rate of 25% but listed insurance companies are paying a corporate tax at a rate of 40%. He demanded reduction of the corporate tax for listed insurance companies.
He also called the imposition of VAT on reinsurance premiums illogical.
The Budget for the fiscal year starting 1 October 2018 is scheduled to be announced on 7 June.
Last year, the BIA said that the insurance sector was overburdened with taxes imposed at several levels. Placing a six-point demand then, insurers wanted the withdrawal of the 5% tax on deposit holders' profits, 15% VAT on agents' commission, 5% source tax and tax on excess expenses, a reduction in corporate tax and an increase in the tax-free dividend income limit.