Re: VAT and Insurance
EDITOR, The Tribune.
The Government has out of the blue come up with what can only be described as a hare-brained scheme obviously made up on the hoof to split the insurance industry in two for the purposes of VAT.
They are proposing that the Life & Health sector be exempt while the non-life sector (Motor, Property, Marine, Aviation, etc.) be VAT registered.
This weird hybrid approach has not been followed in any other country that has introduced VAT, whether in the Caribbean, Europe or the wider world.
The only reason they have suggested for treating the two sectors differently is that Life & Health Insurance is “socially desirable”.
Why is it more socially desirable than insuring your vehicle before taking it on the road or insuring your house or business against hurricanes has not been explained, probably because it cannot be.
Could someone in authority please explain the following?
1 In just about every other country in the world in which VAT has been introduced, the entire insurance sector has been exempted. Why don’t they for once take their own advice about “following best practices” and copy what has been done everywhere else? What makes them think they can reinvent the wheel for this one small country and why would they want to?
2 Their own White Paper states that financial services will be exempt. The whole insurance industry is part of the financial services sector and falls under the portfolio of the Minister of Financial Services who just last week was commenting on captive insurance in the Press. Why are they therefore not following their own White Paper?
3) If every Motor, Homeowners etc premium is increased by 15 per cent do they really expect the insuring public just to accept this?
What, of course, will happen is that many people will decide to do without insurance leading to even more uninsured vehicles on our roads and even less insurance covering the hurricanes which now seem to affect us more and more frequently.
It will also lead to more unemployment because of the downsizing or complete failure of Insurance Companies and Insurance Brokers & Agents, with the resulting loss of revenue to the Government which is the opposite result they were looking for.
CONCERNED
Nassau,
October 4, 2013.
Comments
ohdrap4 10 years, 6 months ago
The public will not take it. They will under-insure.
I keep the minimum third-party insurance on my car to comply with the law. I dropped the catastrophic insurance on my house years ago, it is now only fire. I also reduced the insured value because, if i were to sell the home, it would not fetch the top price it fetched in 2008.
Finally, i dropped the health insurance, after years of bearing group health insurance premium increases, because my coworkers reserve the right to eat fried chicken and smoke.
I dropped life insurance, I am more valuable alive.
The white paper, is just that. Someone must have put it together by copying and pasting from some website.
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