IB proposes Tax exemption for Rs.100,000 of Life Insurance Premium

Kathmandu: The Insurance Board(IB) has submitted 11 point suggestions to the Government of Nepal for inclusion in the upcoming policy, program and budget of the Fiscal Year 2079/80.

The suggestions to enlarge the size of life insurance premium to Rs. 100,000 for the purpose of tax exemption. At present, the Government of Nepal has a provision of tax exemption on life insurance premium upto Rs.25,000 annually.

The IB has urged GoN to make mandatory provision of term insurance for Nepalese worker heading to India. At present, foreign employment term insurance is mandatory for third countries only.

It has suggested the GoN to approve and implement the National Insurance Policy. The IB has stated that the development of suitable mechanism is needed to establish insurance up to the federal, state and local level in order to extend the access of insurance to all the citizens and regions including the low income group. It is suggested that the government should make a multi-year plan and implement it.

To expand the access to insurance by increasing the financial security and savings of the poor and low income people, provide subsidy for micro insurance. Also to make arrangements for VAT exemption in micro insurance.

It is also suggested in the budget to insure all the physical infrastructures owned by the GoN, the state government and the local government. It has been suggested to include insurance in the services provided by the three tiers of government to insure the citizens’ policy and financial assets.

As the scope of investment of insurance companies is narrow, the IB has suggested to expand investment by issuing insurance and Catastrophe Bonds. It has requested the government to provide tax exemption to the insurance companies opting for merger.

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