The Insurance Bureau of Canada (IBC) has repeated its long-standing call to the government of Newfoundland and Labrador to remove taxes on insurance premiums.
“The people of Newfoundland & Labrador have the highest insurance tax burden in the G8,” stated Don Forgeron, the IBC’s Vice-President/Atlantic. “For every dollar of home, car and business insurance they buy, the provincial government charges them 19.6 cents in tax. This adds up to C$80 million [US$ 78.1 million] annually.”
Forgeron called the taxes “unnecessary” and an “unfair burden on homeowners and drivers, for whom insurance is a vital product.” He also noted that the taxes on insurance premiums are “an impediment to businesses and not-for-profit organizations. Because these taxes are levied as a percentage of insurance premiums, organizations that face higher risk are also hit with more tax. Sectors most severely affected include not-for-profits, the hospitality industry and exporters.”
The IBC has stated its objections to the province’s high level of insurance tax in government submissions over many years. The bulletin noted that the problem “in the province as compared to other jurisdictions has been clear since IBC commissioned a tax study by tax expert Jack Mintz in 2002. Recently, the IBC-led, multi-stakeholder Atlantic Task Force on Insurance Availability and Affordability also called for the elimination of premium taxes in the province.”
Although the government of the province said it in 2006 that it “would review the level of tax on insurance products,” it has yet to do anything. “Insurance buyers deserve a decision soon,” said the IBC.
Source: Insurance Bureau of Canada – http://www.ibc.ca
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