NIBA has strongly endorsed a proposal by the New South Wales economic regulator to cut insurance stamp duty and abolish the fire services levy.
CEO Noel Pettersen applauded the NSW Independent Pricing and Regulatory Tribunal ("IPART") for criticising insurance tax in its draft report into state taxation. “The draft report not only recognises but highlights the inequality that applies to the taxation of insurance”, Mr Pettersen said.
IPART recommended improvements to the state’s “least efficient” taxes, including the reduction of insurance stamp duty from 9% to 6%. The regulator also suggested the fire services levy be abolished in favour of using a property rates-based levy to fund the fire services.
Mr Pettersen says these taxes “add to the cost of doing business in NSW, they deter people from taking out appropriate levels of insurance, and fly in the face of the fundamental principles of taxation”.
NIBA has long argued for the removal of cascading taxes on insurance premiums that it claims make NSW and Victoria residents the world’s highest-taxed policyholders.
Submissions to the IPART report close on Friday.