Rank: Chief Joined: 1/3/2007 Posts: 18,342 Location: Nairobi
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Britam might as well write-off the Uganda market for Life Insurance Insurance players who have been in a stagnant sector over the years will have to brace themselves for tougher times as government scraps tax exemptions on insurance products. This follows the introduction of an additional 18% cost as Value Added Tax (VAT) on insurance products that may discourage people from buying covers. In the past, the sector has been enjoying products free from VAT which government has scrapped in the financial year 2014/2015. At 0.65%, Uganda’s insurance penetration is one of the lowest in the world. With the government looking for every prospect to bring money into the Treasury coffers amid donor cuts, the insurance sector, has been deemed fit to contribute to the largely home funded Budget. Currently, in addition to stamp duty, clients also pay an insurance training levy of 0.5% of gross premium on insurance policies. Insurance premium will now be taxed in excess of 20%. That is to say VAT of 18%, an insurance training levy of 0.5%, the Insurance Regulatory Authority levy of 1.5% and stamp duty of UGX 35,000 for those buying general insurance productsGreedy when others are fearful. Very fearful when others are greedy - to paraphrase Warren Buffett
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