Life Insurance Association Urges Finance Minister to Revise Tax Policies
Kathmandu — Officials from the Life Insurance Association Nepal (JEBISAN) met with Deputy Prime Minister and Finance Minister Bishnu Poudel today to present key demands related to the insurance sector. The association highlighted four major issues, including tax exemption on insurance premiums up to Rs 100,000 per year, urging the government to address them in the upcoming budget.
A member present at the meeting held at the Ministry of Finance informed that the urgent insurance-related issues should be prioritized in the next budget. The delegation was led by the association’s president and Citizen Life CEO Poshak Raj Poudel, and included Nepal Life CEO and Vice President Pravin Raman Parajuli, Asian Life CEO and Treasurer Dinesh Lal Shrestha, and Suryajyoti Life CEO and General Secretary Prakash Bikram Khatri.
The association argued that the corporate tax imposed on the profits of insurance companies is impractical. Under the current provision, all claim payments, including death claims, are not counted as expenses when calculating the cost of life insurance. As a result, insurance companies are effectively paying taxes on their expenses rather than their actual profits.
Additionally, the association demanded a tax exemption on insurance premiums up to Rs 40,000, alongside the existing exemption for premiums up to Rs 100,000 annually.
Another key demand was to reduce the tax on income from investments in bonds from the current 15 percent to 5 percent. The association argued that a lower tax rate would encourage more investment in bonds, strengthening the financial position of insurance companies.
The association also proposed including provisions for insurance bonds in the budget, citing emerging risks from risk assessments. They emphasized that insurance bonds are essential to mitigate financial uncertainties and enhance market stability.
Finance Minister Poudel assured the delegation that their concerns would be carefully reviewed during budget planning.