Muhith to reconsider 10pc tax on insurance policyholders profit

Finance Minister AMA Muhith on Sunday said he would consider withdrawing the 10 percent tax at source imposed on the profit made by the policyholders of life insurance.

“I’ll consider the demand for withdrawal of tax at source on the insurers,” he said after a meeting with the leaders of Bangladesh Insurance Association (BIA) at the NEC-II in city’s Sher-e-Bangla Nagar.

BIA chairman Sheikh Kabir Hossain led the delegation. IDRA chairman M Shefaque Ahmed was also present.

The Finance Minister said some issues relating to the industry on the proposed national budget also came up for discussion in the meeting and everyone would know on June 27 whether there is any change.

Muhith said the insurance regulatory regime was very weak in the past and that is why the Insurance Development Regulatory Authority (IDRA) was established over a year ago.

He said the some of the rules and regulations relating to the insurance sector would be published in gazettes so that those could be applied for the development of the sector.

BIA chairman Sheikh Kabir Hossain put forward a strong demand that the Finance Minister should withdraw the provision for imposing 10 percent tax at source on the profit of small policyholders of the life insurance as this has not been the practice elsewhere in the world. “It’s very unfortunate to cut tax at source from the profit of small policyholders,” he added.

About other budget proposals of the association, Sheikh Kabir said the Finance Minister had assured them of considering their demands through discussions after the budget.

After consultation with them, he said, the IDRA had placed the eight-point rule and regulation of the insurance industry before the Finance Minister and hoped that those would be accepted.