PHILIPPINES MAINTAINS LIFE INSURANCE PREMIUM TAX AT 5%

Life insurance premiums in the Philippines will continue to be subject to a 5% premium tax, despite opposition from the Philippine Life Insurance Association, the country’s authorities have confirmed. The trade association has been mounting a campaign against the tax claiming the Philippines is the only country of the 10-member Association of South East Asian Nations that imposes a 5% tax on premiums. But, according to AM Best, Lilian Hefti, commissioner at the Philippines Bureau of Internal Revenue has reiterated the rules and confirmed that reinsurance fees, reinstatement fees, renewal fees and penalties paid to life insurers which are incidental to or connected with insurance policies are also subject to the 5% premium tax. However revenue generated from services independent of premiums, such as management fees, rental income or other services fees, are not subject to the 5% tax, but are subject to value-added taxes.