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Insurance agents fret over planned 2% VAT
The Indonesian Insurance Agents Association (PAAI) has voiced its opposition to a planned 2 percent value-added tax (VAT) on insurance agent services after years of fighting for a 1 percent rate.
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New look: An insurance employee offers a product to a customer at an office of Chubb Life Indonesia in Gading Serpong, Tangerang, Banten, in this undated photo. The insurance firm renovated its offices in Tangerang, Surabaya, Medan, Malang, Denpasar and Jakarta to comply with health protocols and appeal to young customers. (JP/Dhoni Setiawan)
T
he Indonesian Insurance Agents Association (PAAI) has voiced its opposition to the government’s plan to impose a 2 percent value-added tax (VAT) on insurance agent services after years of fighting for a lower rate.
PAAI founder Wong Sandy Surya told news agency Kontan on Tuesday that the association rejected the plan in part because agents were subject to income tax.
In a letter sent to the Taxation Directorate General, the association had lobbied for a VAT rate of no more than 1 percent.
“And in that letter’s journey of around five years, we have been invited to a meeting with the VAT regulation director and the [Fiscal Policy Agency],” Sandy was quoted as saying.
Sandy added that the Taxation Directorate General had agreed with the association’s proposal but that they were still waiting for a final decision from the Finance Ministry.
The planned VAT comes after the government recently overhauled tax rules in a bid to bolster state revenue and rein in a bloated budget deficit after the pandemic forced a huge increase in spending.
Read also: New tax law expected to raise tax revenue by at least 9%
