Malaysia: Premiums to be subject to tax

All insurance premiums, except for life insurance, will be subjected to six percent goods and services tax (GST), said deputy finance minister Datuk Chua Tee Yong.

He said, however, GST on insurance premiums was not an issue as consumers have all along been subjected to sales and service tax (SST).

"With the exception of life insurance, any insurance premiums will be subjected to GST," he told reporters after attending a briefing with retailers in Petaling Jaya. "If I'm not mistaken, SST is levied at insurance."

He said the booklet listed 1,800 taxable items. The list will be emailed to all registered retailers.

Putrajaya is set to roll out the broad-based consumption tax effective April 1, pegged at six percent. This move is despite the opposition's protests that it will further burden Malaysians already grappling with the rising cost of living and price hikes of goods and services as a result of subsidy removal.

Prime minister Datuk Seri Najib Razak, when announcing the implementation of the GST in his Budget 2014 speech, had said the six percent rate would be among the lowest among Asean countries, with Indonesia, Vietnam, Cambodia, the Philippines and Laos capping theirs at 10 percent and Singapore at seven percent.