Slovakia - Economists, insurers critical of proposed voluntary insurance tax (CEEMarketWatch)

 CEEMarketWatch vo svojom dennom reporte zo dňa 12.8.2016 informoval o článku uverejnenom The Slovak Spectatorom rozoberajúcom plánované zavedenie dane z neživotného poistenia s vyjadrením INESS. 

Slovakia - Economists, insurers critical of proposed voluntary insurance tax (CEEMarketWatch)

 Economists and insurers are quite critical of the proposed by the finance ministry tax on voluntary insurance, which they claim will worsen the business environment, dissuade people to insure themselves against risks, hurt insurers' profitability, among others, local Slovak Spectator daily writes.

According to the draft amendment that is currently in interdepartmental consultation procedure, the obligation to pay levies for compulsory car insurance PZP is extended to all non-life insurance sectors. The introduction of the 8% special levy is aimed to support tax revenues by up to EUR 80mn.

The Slovak Association of Insurance Intermediaries argues that measure would bring nothing positive to insurers, but would hurt the business environment and dissuade foreign investments. Non-governmental think tank Institute for Economic and Social Studies INESS sees the rainfall revenues would be used solely for higher spending, which will additionally increase the waste of public money. The Slovak Insurance Association SLASPO argues that unlike PZP, which money is purposefully collected and spent, the extended levy is not legitimate as it infringes the Constitution, represents sort of double taxation and lacks reason, and will lead to discrimination and lower transparency of the legislative and fiscal environment, lower tax collection efficiency with harmful impact on the capital, technological development and economic and social stability in the country. Banks are also dissatisfied with the plan with the Slovak Banking Association SBA stressing that that by introducing the levy the ministry would distort the business environment and significantly impair the competitiveness of domestic entities in the Single European Market.

The Institute for Economic and Social Reforms INEKO think tank also considers that given that the levy is to be applied only to domestic companies, they would be put in a disadvantaged position to their foreign competitors, thus possibly resulting into their profitability decreasing or even turning to a loss, especially given that several local non-life insurance segments are already at the border of sustainability while respecting the Solvency II regulation. Insurance companies also argue that the levy is higher than their own profit from premiums, which may require embedding the levy to the price of their products, possibly dissuading economic agents' decisions to insure. They also argue that a better way of securing stronger tax collection would be to improve the business environment and to remove red tape that would support economic activity and growth.

12.8.2016

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