The Irish Insurance Federation (IIF) has urged the Government to abolish stamp duty on life assurance products and to allow full tax relief on long-term care products.
In its pre-Budget submission, the IIF states that, by levying stamp duty on new life assurance policies, the Government is creating a disincentive for consumers to buy life assurance. The federation estimates it paid £14 million in stamp duty to the Government in 1998.
It argues that the potential loss of revenue from the abolition of stamp duty would be significantly less than the increase in tax revenue to the Government through the implementation of the new exit tax on life policies. This exit tax should be reduced from the proposed 25 per cent to 12.5 per cent for long-term investment policies.
The IIF is also calling for the Government to provide tax incentives to encourage long-term savings, stating this is particularly important at a time of high inflation and would complement other policies to prevent overheating in the economy. It wants the provision of tax incentives to encourage take-up of private insurance against the costs of longterm care.
It proposes the Government should introduce legislation that would provide full tax relief on premiums paid for qualifying approved long-term care insurance products.
