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Brokers welcome call to abolish insurance taxesThe National Insurance Brokers Association (NIBA) has cautiously welcomed the Henry Review’s recommendation that State taxes on insurance are inefficient and should be abolished. Recommendation 79 says: “All specific taxes on insurance products, including the fire services levy, should be abolished. Insurance products should be treated like most other services consumed within Australia and be subject to only one broad-based tax on consumption.” NIBA CEO, Noel Pettersen, said today that the recommendation was just the latest in a long line of findings, including by the HIH Royal Commission and the NSW Independent Pricing & Regulatory Tribunal, that the Fire Services Levy (FSL) and State Stamp Duty unfairly penalises those people prudent enough to insure their property. “At the moment, property insurance is taxed at similar levels to the “sin taxes” on gambling and alcohol. “The insurance tax burden is worst in Victoria and NSW where there is a ‘tax on tax’ effect, with an FSL (which funds over 70% of the fire brigades’ budget), GST on top of that and State Stamp Duty on top again. “This results in an effective tax rate of up to 108% in Victoria and 63% in NSW, and exacerbates under-insurance and non-insurance. “As always, the devil is in the detail but Recommendation 79 is a good start and we look forward to further debate on fairer alternatives,” Mr Pettersen said. ENDS For further information contact Noel Pettersen on 0417 248 712 NIBA is an independent industry association representing 500 firms and more than 2600 intermediaries, who handle almost 90% of the commercial insurance transacted in Australia. Brokers play a major role in insurance distribution, handling $10 billion in premiums annually and placing around half of Australia’s total insurance business. |
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