Government yesterday passed an amendment to the Income Tax Act to make
changes to the taxation of life insurance companies operating in this
country.
Speaking yesterday in the House of Assembly as he led off debate on
the Income Tax (Amendment) (No.2) Bill, Minister in the Ministry of
Finance Ryan Straughn, explained that the adjustments were being made
ahead of 2021 when the “grandfathering period” under which such
insurance companies operate would come to an end.
“... We wanted to ensure that we settle this policy framework now as
we gave a commitment to do, so that companies who are operating in
Barbados will know what the lay of the land is Sir. And passing these
amendments, we can then move to the next stage of seeking to go out
into the marketplace and truly start to... go out and promote Barbados
not only on the basis of tax, but certainly Sir on the substance,
which a number of our professionals offer to companies globally,” he
said.
The Minister’s comments came as he said that the changes to the Act
will give companies a “forward signal” in terms of the public policy
as well as give the Government an opportunity to do some “forward
planning” in respect of what they would like to achieve.
Minister Straughn, reflecting on the life insurance industry, said
such companies have to make investments in order to match their long
term liabilities. In that vein, he said it is
imperative that the management of the companies abide by their duty to
ensure that policyholders or their beneficiaries are able to get what
is due to them.
Straughn made the point while noting that life insurance is
characterised by risks, as is the whole concept of insurance. To that
end, he went on to say that while people are paying their premiums, it
is understood that those premiums have to be invested, but he
maintained that it is important that the manner in which those
premiums are invested, the level of reserves that the insurance is
holding, what they are investing those reserves in vis-à-vis the other
part of the portfolio that may be related to more risk taking, are all
taken into consideration.
(JRT)