Malaysia: 4m non-life policyholders hit by sales tax changeover
Source: Asia Insurance Review | Dec 2018
About 4m general insurance policyholders who renewed or purchased their policies during the goods and services tax (GST) holiday period are affected by the sales and services tax (SST) regime, says the General Insurance Association of Malaysia (PIAM).
According to a report by Bernama, the association’s deputy chairman Chua Seck Guan said that affected policy members included those who purchased or renewed their motor, fire or personal accident insurance during the zero-rated GST period from June to August.
“When they purchased or renewed their policies during the tax holiday, they made a lump-sum payment for 12 months.
“But the zero-rated period was only effective from June to August, which means they still have to pay the SST for the remaining nine months beginning from September,” he said.
Mr Chua said PIAM had appealed to the Ministry of Finance for an SST waiver.
He added that rightly, PIAM should have passed an endorsement to collect the chargeable tax from affected policyholders, but no action had yet been taken.
“We are still waiting for the decision from the ministry,” he said.
In August, PIAM issued a statement calling on the government to remove the SST on general insurance products. A