The Ghana Revenue Authority (GRA) has implemented a 15% Value Added Tax (VAT) on insurance premiums, a move that has triggered widespread concern among industry players and policyholders alike.
Effective immediately, this directive affects general insurance products—such as motor, fire, travel, and property insurance—potentially increasing the cost of living and doing business in Ghana. Industry insiders warn that the new tax could lead to lower insurance penetration, as individuals and small businesses may now view insurance as an unaffordable luxury rather than a necessity.
The GRA insists that the move is part of efforts to broaden the tax net and improve domestic revenue mobilization. However, critics argue that the timing is poor, especially amid the ongoing economic challenges and recent utility tariff hikes.
“This is a double burden on Ghanaians,” said a financial analyst. “Just recently, we saw a 17.5% increase in electricity tariffs. Now, insurance—which is meant to be a safety net—has also been taxed heavily.”
Many Ghanaians are expressing frustration over what they see as the government’s growing reliance on consumption-based taxes to raise revenue, rather than focusing on broadening the tax base equitably or cutting down on wasteful public spending.
The Ghana Insurers Association is expected to issue a formal response in the coming days, even as public debate continues to swell over the impact of the new tax policy.
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