A draft income tax Bill, when it is passed into law, will have little impact on the insurance sector because there is hardly any profit being made by insurers, the secretary general of the Jordan Insurance Federation (JOIF) has said.
Mr Maher Hussein said that the profit margin in the insurance sector is very low, reports Roya News.
He said that the sector has suffered heavy financial losses, particularly in motor business in which insurance companies lose JOD30 ($42) per vehicle insured annually. Around 1m vehicles are insured each year. Insurers have suffered losses totalling nearly JOD140m over the past 10 years in compulsory classes of insurance losses as a result of fixed tariff rates.
The financial results of 24 insurance companies in the Jordanian insurance market in 2017 were under pressure with provisional figures showing a 87% decline in profits compared to 2016. Profits before tax and fees plunged to JOD4.4m in 2017 against JOD34.8m in 2016, according to preliminary data published by JOIF for the 24 insurers.
The proposed law aims to raise the tax rate on insurance companies from 24% at present to 40%.