KUALA LUMPUR: About four million general insurance policy holders who renewed or purchased their policies during the Goods and Services Tax (GST) tax-holiday period will be affected by the Sales and Services Tax (SST) regime, says the General Insurance Association of Malaysia (PIAM).
Deputy Chairman Chua Seck Guan said 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 during a press conference on the upcoming 3rd ASEAN Insurance Summit (3rd AIS) here today.
Chua said rightly, PIAM should have passed an endorsement to collect the chargeable tax from affected policy holders, but no action had yet been taken.
“We are still waiting for the decision from the ministry,” he said, adding, the SST implementation would not affect the sales of general insurance as it is a tax that “everyone has to pay”.
In August, PIAM issued a statement calling on the government to remove the SST for general insurance products.
In the statement, Chairman Antony Lee said other than the impact on policy holders who renewed or purchased products during the tax holiday, the SST was a contrast to the former service tax regime, which would not apply to insurance policies purchased by individuals.
Meanwhile, when asked if the Life Insurance Association of Malaysia (LIAM) would continue to ask the government to include tax relief measures as part of the upcoming Budget 2019, President Anusha Thavarajah said it was a request the association makes every year.
“At the end of the day, we will continue to do our best to grow the penetration rate to 75% by 2020 from the current 54%,” she added.
Organised by the ASEAN Insurance Council (AIC) and supported by LIAM and PIAM, the 3rd AIS will be held on Nov 28 at Sasana Kijang (Bank Negara Malaysia) where the industry players would discuss the impact of the Fourth Industrial Revolution on the insurance industry.
