Insurance premium: proposal to abolish 1 percent Federal Insurance Fee under study

The budget makers are seriously considering a proposal to abolish one percent Federal Insurance Fee on insurance premium in coming budget (2019-20). Sources told Business Recorder here on Tuesday that the Finance Division, Federal Board of Revenue (FBR) and Securities and Exchange Commission of Pakistan (SECP) are reviewing the said budget proposal. A meeting to discuss the said budget proposal was also convened at the Finance Division.
In the Finance Act 1989 the Federal Insurance Fee (FIF) was levied @ 1% on premium paid on all types of insurance. The SECP has proposed withdrawal of one percent Federal Insurance Fee on insurance premium on all types of insurance under Finance Act 1989.
In order to reduce the cost of insurance for end consumer and to increase the spread of insurance it is suggested that Federal Insurance Fee on Insurance premium levied @ 1% on all types of insurance under Finance Act 1989 be withdrawn. This will reduce the cost of doing business for the insurance companies as well. The estimated FIF collection during the financial year 2018-19 is estimated to be Rs 947 million and it is expected that in the forthcoming 2019-20 FIF applicable on the insurance companies would be around Rs 1 billion.