Tax take from insurance firms up 12% to P19.4B

Tax collections from insurance com­panies rose 12 percent in 2015 from the previous year, Insurance Com­mission (IC) data showed.

In a report, the IC said tax collec­tions from life and non-life insurance companies amounted to P19.38 bil­lion last year, up from 2014’s P17.21 billion.

The increase was attributed to collections of documentary stamp tax (DST), value-added tax (VAT) and other taxes.

Total DST collections last year rose 4.18 percent to P5.86 billion from P5.63 billion in 2014.

VAT collections from the sector amounted to P6.32 billion in 2015, up by 32.34 percent from P4.77 billion in the previous year.

The IC explained that “non-life insurance policies are subject to DST at a rate of 12.5 percent or 50 centa­vos for every P4, or a fractional part thereof, of the amount of premium charged, while premiums collected on these policies are generally sub­ject to 12 percent VAT.”

Collections of premium tax in 2015 reached P957.3 million, 9.66 percent higher than year-ago’s P872.95 million.

On the other hand, revenue col­lections from withholding taxes de­clined by 1.76 percent to P3.29 billion from 2014’s P3.23 billion.

The increase in tax collections from the insurance industry was at­tributed to higher premium collec­tions of P854.97 million for 2015 from P777.69 million in 2014.

Insurance Commissioner Em­manuel Dooc said “truly, the increase in tax payments arising from the in­surance business is not only a reflec­tion of development of the local insur­ance market, but also a manifestation of how the insurance industry and in­suring public exercise their responsi­bilities to the country as taxpayers.”

Dooc remains optimistic on the sustained rise of tax collections from the industry as companies continue to innovate their products to address specific needs of the people.

He said the microinsurance sec­tor would also greatly boost tax reve­nues.