The Tasmanian Government will reduce its insurance duty on Motor Accident Insurance Board (MIAB) premiums in 2017/18.

The state budget, released last week, shows insurance duty on general and life insurance contracts raised $79.6 million in 2013/14. It is forecast to raise $83 million this financial year and $86.5 million in the next.

Tasmania is one of the last states to charge a fire services levy. The charge raised $17.8 million in 2013/14 and is budgeted to bring in $18 million this financial year and $18.2 million in the following year.

The Government is trying to reduce its budget deficit and will take a “special dividend” of $100 million from the MAIB this year, on top of the budgeted $7.2 million figure.

“The increase in dividends from the MAIB reflects forecast improvements in claims experience and investment returns in 2013/14 and, to a lesser extent, increased premium revenue and the impact of these factors on the MAIB’s five-year rolling average dividend policy,” budget papers say.

Reducing the motor duty is expected to cost the state’s finances $4.4 million in 2017/18.

The Liberal Government, elected in March, has reversed motor duty increases introduced by the previous government in 2012.