Insurance tax dropped, rebates coming, Williams says
A controversial sales tax on insurance premiums was eliminated Tuesday, giving Newfoundland and Labrador consumers a break on their home and vehicle costs.
Dropping the 15 per cent retail tax on insurance will cost the government about $94 million this year and $75 million in each subsequent year, Premier Danny Williams told the house of assembly.
The order is also retroactive to Jan. 1, meaning that policy holders will receive rebates.
"This substantial investment will benefit each and every individual, corporation, small business, community, municipality and volunteer organization in this province and our government is proud to make it happen," Williams said.
The tax was a bane for many consumers and employers. Williams said the issue was raised repeatedly during budget consultations held this winter.
"I appreciate that this will place a small compliance burden on insurers," Williams told the house. "However, the insurance industry has lobbied long and hard for the elimination of this tax and I am confident they will be pleased to comply."
Williams said the governing Progressive Conservatives had wanted to eliminate the tax earlier, but focused instead on other priorities.
The elimination and rebate will not come into effect, though, until the house passes this year's budget legislation later in the spring session.
Opposition leaders applauded the decision, calling it long overdue.
"For some reason, I feel like I'm seeing the opening act to the budget that's going to come up in the next week or two," Liberal Leader Yvonne Jones said.
"Certainly, this is a good first start. It makes me believe that persistence pays off," said Jones, adding that her party raised the issue in 24 different news releases alone.
New Democratic Leader Lorraine Michael said she was delighted to see an "unjust tax" eradicated.
"You're listening to the people, and that's good," Michael said.
"I [am also] awaiting the budget, and I'm dying to see what else you're listening to," she said.