The implementation of the Goods and Services Tax (GST) in the insurance industry would benefit consumers, said Malaysian Insurance Institute (MII) chief executive officer Datuk Syed Moheeb Syed Kamarulzaman.
He said over a period of time, the claims cost is expected to go down and will impact upon the overall industry statistics, moving forward.
"In my view, the deterioration of the motor claims experience will be somewhat arrested by the GST," he told reporters at the 'General Insurance Agent Convention 2014' press conference here today.
Deputy Finance Minister Datuk Ahmad Maslan was the guest of honour at the event.
Citing motor insurance claims as an example, he said that the insurance is divided into two -- parts and labour.
"When we pay claims to the workshop, it charges a service tax on the parts at a fixed percentage.
"With the new GST regime, they will be able to seek reimbursement on the input side, when the workshop purchases from the wholesaler.
"In short, what would happen is that the total cost of claims will be lower," he said, adding this would benefit consumers over the long term.
The GST, which is proven to be a better tax system as it is more efficient, effective, transparent and business-friendly, is adopted in 160 countries worldwide, and Malaysians would enjoy cheaper goods and services for many basic necessities if the government implements it.-- Bernama