By reducing the tax burden, greater sale of insurance products that can later affect a larger amount of tax revenues for the government and protection for the public. One instance is the effect of the reduction by two percent on the five-percent premium tax on life insurance policies, which result to an increase in sales of life insurance products, from P57 billion in 2009 to P120 billion of 2012.
The non-life insurance industry reported a net income of P2.57 billion in 2012 that declined by 22 percent from the 2011 earnings level of P3.3 billion. While assets boomed to P125.5 billion that increased by 12 percent from the previous year’s P112 billion.
If this is to be approved, the reduction of tax burden many result to a decrease in the cutthroat competition for the sake of the insuring public and the insurer itself. However, this may affect sectors such as the government and their inflows since taxes will decrease. More importantly, the industry affected by this cut on taxes will be able to compete on equal footing with other markets regarding profitability in the much anticipated ASEAN integration of 2015.
by Caccam, Florencio,
Cetoy, Krizia Kate