ZAFA proposes that funeral policy premiums be tax deductible or qualify for a tax credit
Own correspondent
Zimbabwe Association of Funeral Assurers (ZAFA) says it proposing 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.
The proposition is being done through the Ministry of Finance and Economic Planning and the Insurance and Pensions Commission (IPEC).
ZAFA president, Solomon Chikanda told delegates attending the institute’s ongoing 4th Funeral Assurance and Services Conference in Bulawayo yesterday that this was a critical issue which may result in the country meeting financial inclusion goals.
“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 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.
“This is a critical issue for the industry which may increase funeral policy uptake and increase insurance penetration which may result in the country meeting financial inclusion goals,” he said.
Chikanda said the institute had taken note of the need to raise 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.
The funeral assurance industry continues to grow with total assets having grown 14% to US$70,173,000 as at 31 December 2017 from
US$61,799,000 as at 31 December 2016 (while funeral assurance industry’s premium income grew 4% to US$39 982 000 for the year ended 31 December 2017 from US$38,615,000 in 2016.
Chikanda added that among other challenges the sector was facing there was abuse of funeral policies to make fraudulent claims.
“As funeral assurers, we recognize our responsibility that we will continue to endeavor to comply with prescribed assets requirements and
support government’s projects and efforts in sustaining the economy.
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.
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 perpetration of funeral assurance fraud we are witnessing,” he said.
The conference which is being held the theme “ FUNERAL BUSINESS – A CALL TO SERVE’’ is meant to challenge all funeral practitioners that engaging in funeral business is far much beyond profit or financial benefit but brings much more important roles namely the social and
moral obligations.
