The Bangladeshi insurance sector is overburdened with taxes imposed at several levels, which hinders the growth of the market, according to the Bangladesh Insurance Association (BIA) in its pre-Budget media conference.
Placing a six-point demand, insurers want 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, reported The Financial Express.
The BIA said deposit holders do not get lucrative returns from insurance companies, as their main benefit is accident coverage. When there is no accident, the policyholders receive very little in returns on the maturity of their deposits.
Such taxes make people reluctant to buy insurance and they would much rather deposit their money with banks, the association said.
The government imposes dual taxes on insurance agents through the 15% VAT and the 5% source tax, the BIA notes.