WINNIPEG, April 18, 2012 /CNW/ - The Manitoba government's decision in yesterday's provincial budget to impose Retail Sales Tax of 7% on home, business and auto insurance will hurt consumers, says Lindsay Olson, Vice-President for Manitoba with Insurance Bureau of Canada (IBC).
"IBC is very disappointed by this tax decision, which will make insurance - an essential product - less affordable for consumers like homeowners, tenants and business owners," says Lindsay Olson, Vice-President for Manitoba with IBC.
Moreover, the decision is even more punitive when one considers that consumers will be paying an effective tax rate of 11.5% on insurance premiums. The 7% will be applied on top of current taxes that include embedded premium taxes and fire tax at 4.25% on property insurance. IBC estimates the additional tax will cost Manitoba consumers an extra $48 million based on 2010 premium data.
The new tax comes into effect July 1, 2012, and will be applied to new and existing policies in place at that date. This means that those who have already paid their insurance premium for the period starting July 1st will have to retroactively pay this new tax burden. The tax will not apply to Autopac policies written by Manitoba Public Insurance.
About Insurance Bureau of Canada
Insurance Bureau of Canada is the national industry association representing Canada's private home, car and business insurers. Its member companies represent 90% of the property and casualty (P&C) insurance market in Canada. The P&C insurance industry employs over 114,000 Canadians, pays more than $7 billion in taxes to the federal, provincial and municipal governments, and has a total premium base of $40 billion.
To view media releases and information, visit the media section of IBC's website at www.ibc.ca.
For further information:
Media Relations Officer
Insurance Bureau of Canada
416-362-2031 ext. 4312