PH congressman proposes 2% tax collection on non-life premiums

Currently, only life insurance premiums are taxed in the country.

A Philippine congressman proposed legislation in which non-life premiums will be taxed 2%, aiming to “rationalize the non-life insurance industry’s tax burden.”

The bill, if passed, will be amending Section 123 of the National Internal Revenue Code (NIRC).

House Ways and Means Chairman and Albay Rep. Jose Ma. Clemente S. Salceda said in the bill’s explanatory note that the proposed bill aims to levy the tax on the total premiums collected from every individual, company, and corporation engaged in the insurance business in the Philippines, excluding purely cooperative companies and associations.

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Presently, only life insurance premiums are taxed in the Philippines.

Additionally, the bill proposes a one-time documentary tax stamp for insurance policies exceeding P100,000, with varying rates based on the insured amount:

• P20 for policies up to P300,000.
• P50 for policies between P300,000 and P500,000.
• P100 for policies from P500,000 to P750,000.
• P150 for policies between P750,000 and P1m.
• P200 for all insurance policies exceeding P1m.

No tax stamp will be applied to policies valued below P100,000. Furthermore, the proposed legislation seeks to introduce a one-time documentary tax stamp requirement for fidelity bonds and other insurance policies.