Victoria expects to collect about $2.3 billion in insurance taxes next financial year, according to the state government’s latest budget.

Forward estimates project the sum will rise to nearly $2.41 billion in 2026-27; $2.52 billion in 2027-28; and $2.63 billion in 2028-29.

“Growth in insurance taxes revenue is driven by the interaction of the gradual reduction in the business insurance duty rate with growth in insurance premiums,” the budget paper says.

This financial year, insurance taxes totalled about $2.2 billion.

Victoria charges a levy of up to 10% on all general insurance policies sold in the state.

For certain business insurance policies, the levy will be cut by 1 percentage point to 8% from July 1 under a plan to progressively reduce commercial insurance taxes to zero by 2033.