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UIA: Tax policy not exemption is key for growth of insurance industry
Insurance is the third most taxed sector in Uganda having to bear a Value Added Tax (VAT) of 18 per cent, Stamp duty (Shs35,000), With Holding Tax on reinsurance services (10 per cent), in addition to a training levy, with these taxes and levies being respectively applied. Prior to the changes in tax policy, we were growing at an average of 18-20 per cent. Since then, we have grown at less than 15 per cent, an indication that the market, especially individual buyers, are not purchasing as much insurance. was a particularly testing year, and growth will be at less than 5 per cent. Since insurance is an extremely price sensitive service, the tax component- which in some cases is much higher than the actual premium- acts as a disincentive to the consumers. Were we to impose compulsory motor insurance as Mr Matsiko proposes, it is critical that the actual cost of the product and the willingness and ability of the market to purchase are taken into account.Read more
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ccUIA: Insurers unveil plan to hit 2.1% penetration
The Uganda Insurers Association has unveiled a master plan to drive sector penetration to 2.1% of the economy. They hope to do this through harnessing technology and enforcement of insurance related legislation.Insurance penetration increased to 0.85% after health membership organisations were brought under the supervision of the Insurance Regulatory Authority.Hitherto, penetration had stalled at 0.65%. Insurance penetration in Tanzania is 2.3%, Rwanda 1%, while Kenya has the biggest penetration at 3.8%.Speaking to the media after the 50th UIA annual general meeting at the Kampala Serena Hotel, Miriam Magala, the association’s chief executive officer, said penetration will increase if insurers address the evolving needs of consumers in real time. Read more
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UIA: Insurance Players Unite to Build Sustainable Local Market

Uganda Insurance Association and the Insurance Institute of Uganda have teamed up to create awareness amongst the population through a festival that seeks to bring together different insurance service providers in the country and the general public.Speaking to Chimpreports, the Chief Executive Officer of Uganda Insurance Association, Miriam Magala said the public forum is aimed at creating awareness and enhance public knowledge on suitable insurance products on the market.“Face to face meeting and showcasing our work enables us to interact and develop better products for the economic market,” she said.Uganda’s Commissioner for Investment and Private Sector Development, Stephen Kasagaki, while representing the, Minister of State for Finance, Planning & Economic Development (Investment), Eng. Ajedra Gabriel Aridru (pHD) at the launch of the campaign at Centenary Park said insurance business has been in a stagnated state.Read more
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UIA: 18% VAT likely to hurt Uganda’s insurance growth

The government’s move to scrap tax exemption is viewed by the Chief Executive Officer of Uganda Insurers Association, Ms Miriam Magala, as a move that will cripple the sector’s growth since insurance product buyers are already burdened with taxes introduced in the financial year 2013/4.“As you will appreciate, the recent increment in stamp duty from Shs5,000 to Shs35,000 in 2013 significantly increased the cost of insurance and negatively affected the uptake of insurance services. The quick imposition of VAT in 2014 will further increase the final cost borne by a consumer who is still grappling with the significantly increased cost to begin with,” Ms Magala said.However, finance spokesperson Jim Mugunga, in an e-mail to Prosper magazine, said government scrapped tax exemptions across sectors and insurance is not exceptional.“The government removed tax exemptions last year across sectors and not necessarily targeted at only insurance. This policy, unless revoked, remains operational because we believe that exemptions had served the purpose for which they were initially allowed but it was also intended to curtail associated abuse,” Mr Mugunga said. Read more
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