In a bid to raise awareness of the excessive and inequitable taxation of insurance, National Insurance Brokers Association (NIBA) CEO Noel Pettersen has written to every state and territory Treasurer calling for gradual reform.

NIBA is stepping up its campaign to raise client awareness of the amount of tax they are paying on premiums. Mr Pettersen says stamp duty on insurance adds to the cost of doing business and discourages people from protecting themselves and their property from catastrophes and disasters.

The letter says insurance brokers represent the interests of insurance buyers and handle more than 80% of all business insurance.

According to a recent study by Deloitte, the tax rate on household insurance is higher in all Australian states and territories than it is in South Africa, Germany, France, the UK, Ireland, Singapore, Hong Kong and Japan. The position with commercial insurance is similar.

Mr Pettersen quotes studies of state business by such groups as the Productivity Commission, the Heads of Treasuries State Taxes Working Group – comprising representatives of all state and territory treasuries – and Access Economics which all conclude that stamp duties and transaction taxes are among the most distortionary of all taxes available to the states.

“Insurance buyers do not expect that stamp duty on insurance could be completely abolished immediately,” Mr Pettersen said. “NIBA would, however, welcome an acknowledgement that the stamp duty payable on insurance is an inequitable tax and that your Government will move over a period of years to do away with it.”