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Malaysia’s Finance Ministry has announced tax exemptions for all individual policyholders who had bought or renewed an insurance policy during the tax holiday period from June 01 to Aug 31, 2018.
The exemption covers conventional motor, fire, and accident insurance, as well as its takaful equivalents, reports state news arm Bernama.
Finance Minister Lim Guan Eng said that insurers must reimburse any services taxes they have charged their customers. He estimated that 4.4 million policyholders would receive refunds, totalling MYR132 million (US$31.6 million).
However, premiums paid for general insurance and takaful policies bought beginning September 01, 2018, will be subject to a services tax of 6%, as pursuant to the Services Tax Act of 2018.
The General Insurance Association of Malaysia (PIAM) has criticised the imposition of the services tax on general insurance premiums, arguing that it is detrimental to consumers.
