This paper provided basic information on the country’s pre-need industry and its tax treatment as well as its response to the COVID-19 pandemic.
The pandemic highlighted how crucial having safety nets in case of unexpected costs or expenses, especially for the most vulnerable sector of society. To help reduce the cost of pre-need plans, Package 4 of the Comprehensive Tax Reform Program pushes for the shift of the tax treatment of pre-need plans from the current 12% value-added tax to 2% premium tax to place them on equal footing with life insurance companies as both industries are in the life insurance business. The said tax reform would make pre-need plans more affordable, thereby encouraging more Filipinos to invest and safeguard their future needs.