Axed insurance tax will mean job gains: business group
CBCnews.ca, 23 April 2008
A Newfoundland and Labrador government decision to axe a tax on insurance premiums will help some small companies expand, a lobby group says.
Insurance broker Bob Dunne says it could take months to develop a method of giving rebates to consumers. Insurance broker Bob Dunne says it could take months to develop a method of giving rebates to consumers.
Premier Danny Williams announced the elimination of the 15 per cent tax on Tuesday.
Bradley George, director of the Canadian Federation of Independent Business in Newfoundland and Labrador, said the elimination of the tax is great news for his members, who have lobbied for years to get rid of it.
"This tax exists in only two other provinces…It's a tax that's unfair, and this is simply going to be really, really beneficial to small business."
George said he expects many business owners will use the tax savings to create more jobs.
The elimination of the tax will also benefit individual consumers. The government estimates that getting rid of the tax will mean a loss to the treasury of $94 million this year, and $75 million in every year thereafter.
The elimination of the tax will be retroactive to Jan. 1, meaning that many consumers will receive a rebate. However, that cannot happen until house of assembly passes legislation for the upcoming provincial budget.
Bob Dunne, president of the Insurance Brokers Association, said consumers should know it could take months for their tax break to come through.
"In a word, the government has your tax dollars today," Dunne said.
"We'll have to speak to government about a method to get that money back to either the broker to refund to the consumer," said Dunne, adding it will take time to develop a way of refunding policyholders.
"Just because of the vast number of consumers, it will take a fair amount of time to deal with every individual and arrange for that cheque to go out."