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Around four million general insurance policyholders will be affected by the new sales and services tax (SST) regime, according to the General Insurance Association of Malaysia (PIAM).
Chua Seck Guan, the association’s deputy chairman, said that the new tax will affect policyholders who bought or renewed their motor, fire, or personal accident cover during the goods and services tax (GST) tax holiday from June to August 2018, Bernama reported.
“When they purchased or renewed their policies during the tax holiday, they made a lump-sum payment for 12 months,” Chua told the media at a press conference regarding the upcoming third ASEAN Insurance Summit.
“But the zero-rated period was only effective from June to August, which means they still have to pay the SST for the remaining nine months beginning from September.”
Chua said that PIAM has already submitted an appeal to the Ministry of Finance asking for the SST to be waived.
“We told the [ministry] that the number of affected policy holders, at four million, is quite big. So, it makes sense for them to consider favourably our request,” he said.
PIAM made a statement in August calling for the government to scrap SST for general insurance products. The group’s chairman, Antony Lee, said that aside from the impact on policyholders who renewed or purchased products during the tax holiday, the SST was a massive departure from the former service tax regime, which did not apply to insurance policies purchased by individuals.
