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ICA seeks help on NSW duty removal deadline

Insurers have called for help from the NSW Government as they struggle to meet a January start date for removing stamp duty from crop and livestock policies and various small business covers.

“There is a growing risk that without additional flexibility in compliance, our members will not be able to complete the necessary arrangements by the commencement date,” the Insurance Council of Australia (ICA) says in a submission.

“From a systems and compliance perspective, the changes required to implement the exemptions are extensive and require considerable time and human resources to develop, test and implement.”

ICA says insurers who deal with intermediaries face added issues due to the number of parties involved, and challenges are compounded for renewal notices issued up to three months in advance.

“It must also be noted that at the very time our members are working to implement these administratively complex reforms, they are also facing the challenge of having to re-establish as quickly as possible collection of the emergency services levy,” ICA says.

NSW announced the changes in the June state budget, in a move supported by insurers.

About 677,000 businesses with a turnover below $2 million will be exempt from duties on premiums for commercial vehicle, professional indemnity and product and liability cover.

The ICA submission suggests smoothing the eligibility process for stamp duty exemptions by accepting oral declarations or “negative assurances” that are used elsewhere in the industry.

It also suggests Revenue NSW establish a register of eligible businesses, similar to the system it has in place for charities wanting to claim an insurance duty exemption.

“To provide certainty and ease of application, it is essential that insurers can rely on the declaration of a small business and not have to verify in any way their eligibility,” ICA says.

The submission says the exemptions should apply to new policies starting January 1 or later, and those where renewal notices are issued following the end of this year.

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