Source: Tax funeral policy premiums — Zafa – DailyNews Live
Adelaide Moyo 19 September 2018
HARARE – Zimbabwe’s funeral service industry says government should make
policy premiums qualify for tax credit in an effort to increase the uptake
of funeral cover by the public.
Solomon Chikanda, the Zimbabwe Association of Funeral Assurers (Zafa)
president, said there is need for government to support the uptake of
funeral policies.
“In an effort to increase the uptake of funeral cover by the public, the
industry is kindly proposing to the ministry of Finance… through the
Insurance and Pensions Commission (Ipec) that funeral policy premiums be
tax deductible or qualify for a tax credit in the hands of the individual
tax payer in the same way that medical aid contributions are treated,” he
said at the 2018 Funeral Assurance and Services conference in Bulawayo.
This comes as the funeral assurance industry continues to grow as total
assets went up 14 percent to $70,17 million during the year ended December
31, 2017 compared to $61,79 million reported in the previous comparable
period.
According to Ipec, the funeral assurance industry premium income advanced
four percent to $39,98 million compared to 38,61 million reported in the
previous review period.
Chikanda said funeral assurance industry members remain determined to
structure products that are both affordable and accessible to low-income
earners.
He said there has been abuse of funeral policies by some members of the
public hence the need for assurers to ensure that the nature of the
business is not a temptation to fraud.
“We have also noted with concern the abuse of funeral policies or funeral
cash plans to make fraudulent claims by some unscrupulous members of the
public,” Chikanda said.
“It is therefore critical that as assurers we do a serious self-introspect
of both our products and systems to ensure that the nature and structure
of some of our products does not pose as a temptation to the penetration
of funeral assurance fraud we are witnessing.”
Chikanda said this year’s theme “Building businesses and serving
communities with passion” is meant to challenge all funeral practitioners
that engaging in the funeral business is far much beyond profit or
financial benefit but brings much more important roles that are the social
and moral obligations.
“These obligations mean that funeral assurers and funeral services
industry is duty bound to ensure that our society gets decent and
dignified burials when our clients pass on,” he said.
The Vineyard managing director also indicated that funeral assurers will
continue to comply with prescribed assets requirements and support
government’s projects and efforts in sustaining the economy.
Funeral assurance companies are required by the law to invest at least 7,5
percent of their assets in prescribed assets.
“We have also taken note of the need to raise our minimum capital to the
new levels as prescribed. However, the liquidity and other economic
challenges currently in the economy may slow down our pace as we strive to
meet the set deadlines,” Chikanda said.
He said strategic relationships and networks are necessary to sustain
operations in the funeral industry.
The conference is attended by stakeholders from USA, Canada, Botswana,
South Africa and Kenya.
– The Financial Gazette
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