SST on General Insurance

About four million general insurance policy holders who renewed or purchased their policies during the Goods and Services Tax (GST) tax-holiday period will be affected by the Sales and Services Tax (SST) regime, says the General Insurance Association of Malaysia (PIAM).Affected policy members included those who purchased or renewed their motor, fire or personal accident insurance during the zero-rated GST period from June to August.

When they purchased or renewed their policies during the tax holiday, they made a lump-sum payment for 12 months. 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,“ he said during a press conference on the upcoming 3rd ASEAN Insurance Summit (3rd AIS) here today.

PIAM had appealed to the Ministry of Finance (MoF) for a SST waiver.  “We told the MoF that the number of affected policy holders, at four million, is quite big. So, it makes sense for them to consider favourably our request. PIAM should have passed an endorsement to collect the chargeable tax from affected policy holders, but no action had yet been taken.

In August, PIAM issued a statement calling on the government to remove the SST for general insurance products. Other than the impact on policy holders who renewed or purchased products during the tax holiday, the SST was a contrast to the former service tax regime, which would not apply to insurance policies purchased by individuals.