Insurance sector upbeat over 2023 budget

THE 2023 national budget is set to positively impact the insurance sector and the overall economic growth as the measures contained in the plan will encourage businesses to reinvest and allow citizens to adequately prepare for retirement.

The abolishment of the 20 percent withholding tax ( WHT) on reinsurance and retrocession is a welcome and bold move, according the Insurers Association of Zambia president, Mr Moses Siame.

Mr Siame said the application of WHT on retrocession was set to adversely affect the reinsurance market, which was not the intention of the initial WHT policy.

“We look forward to exploring other ways to grow the reinsurance market” he said in their reaction to the 2023 national budget.

Mr Siame also welcomed the pronouncement that Life Insurance funds income would be exempt from income tax.

He explained that this would attract more citizens to invest in long term life insurance policies that will add to financial stability of citizens, and preparedness for retirement.

Mr Siame stated that this would also reduce the number of Zambians who faced destitution at retirement, and ensure they had disposable income.

He emphasised that this measure would in turn contribute to economic activity.

“We also applaud the increase in allowable expenditure for the construction of employee housing, from K20, 000 to K100, 000 for 2023. We also applaud the increase of disallowed amount for non-cash fringe benefit in the form of housing, from 30 percent to 37.5 percent.

“This will encourage decent housing for all citizens. It will also bolster the construction sector in the process. We are confident that policies such as Contractors All-Risks, and House Insurance, will be made use of to ensure these housing investments are protected,” Mr Siame said.

On Pay As you Earn, Mr Siame said it would allow citizens in formal employment to have more disposable income, which in term would drive the growth of many businesses within communities.