The Cabinet Office said Saturday it will pursue an independent tax exemption system for earthquake insurance premiums in line with requests for revisions to the tax system in fiscal 2002, government officials said.
The new system aims to ease the burden of insurance premiums and increasing the number of earthquake insurance subscribers, and is eyeing exemptions with limits of 50,000 yen for national income taxes and 35,000 yen for local income tax, the officials said.
Under the current system, the exemption on fire and other nonlife insurance premiums also includes quake insurance premiums.
However, in most cases, the maximum allowable tax exemption is taken up by fire insurance premiums alone due to the small scope of exemptions. This is the reason a separate system that exempts taxes for quake insurance is being considered, the officials said.
According to the Marine and Fire Insurance Association of Japan, of the people who take out property insurance, 16 percent had taken out quake coverage as of the end of fiscal 2000, more than twice the rate recorded at the end of fiscal 1993, before the 1995 Great Hanshin Earthquake, when it stood at 7 percent.