BANGLADESH FM SEES SCOPE FOR REDUCING TAX ON LIFE INSURANCE

Finance Minister AMA Muhith Monday said there is scope to reduce the income tax rate on life insurance, as the prevailing rate in Bangladesh is the highest among neighbouring countries.

At present, the government is charging 42.5 per cent interest rate on life insurance, whereas the rate is under 20 per cent in India.

"The rate is very high, I think there is a scope to reduce it. But we have to look into the matter carefully," he told UNB after holding a meeting with the nine-member delegation of the Bangladesh Insurance Association (BIA) at his ministry's conference room Monday evening.

Bangladesh Insurance Association (BIA) chairman AKM Rafiqul Islam led his delegation.

Muhith also said that the government would have a closer look into the administrative expenses of the non-government organizations which are engaged in micro-insurance activities.

He said that the NGOs are exempted from paying taxes on the condition they provide services to the poor people.

"But if they are engaged in spending the money in luxurious ways in the name of administrative cost, then we have to look into the matter," he said.

He also said that the NGOs are not authorized to provide any sort of insurance in the name of micro-credit.

Terming the insurance sector of the country still immature, the Finance Minister assured the BIA delegation of extending all-out cooperation for flourishing the sector. In this connection, he sought a roadmap from the BIA for the proper expansion of the sector.