New Insurance tax could cripple local firms and cost jobs-MP warns
By DL News
Published
Updated
2 min read
Set to take effect on July 1, 2025, the Ghana Revenue Authority (GRA) has announced a 15% Value Added Tax (VAT) on non-life insurance services — including policies covering property, health, and travel. Motor insurance, however, is excluded...
Dr. Kingsley Agyemang, Member of Parliament for Abuakwa South, is sounding the alarm over the government’s new tax policy targeting non-life insurance premiums, warning that the move could destabilise local businesses and lead to mass job losses.
Set to take effect on July 1, 2025, the Ghana Revenue Authority (GRA) has announced a 15% Value Added Tax (VAT) on non-life insurance services — including policies covering property, health, and travel. Motor insurance, however, is excluded.
The measure, part of the broader 2025 national budget, is intended to boost domestic revenue generation for public services. But according to Dr. Agyemang, the potential economic cost far outweighs the expected gains.
In an interview with the media, the MP described the policy as “a dangerous 21% tax burden” when combined with an existing 6% levy under the VAT (Amendment) Act, 2023 (Act 1107). He specifically cited Enterprise Insurance’s recent announcement to implement both taxes on all non-motor policies as a sign of what's to come.
“This is not the time to pile pressure on an already struggling sector,” Dr. Agyemang stressed. “We risk wiping out Ghanaian-owned insurance companies that are operating on tight margins.”
He argued that the sector plays a pivotal role in Ghana’s economic resilience, offering not just risk protection but thousands of skilled jobs. Small and medium-sized indigenous insurance providers, he noted, are especially vulnerable and may not survive this new fiscal burden.
Dr. Agyemang has called on President John Mahama to suspend the rollout of the tax and engage the insurance industry in dialogue. He advocated for a more inclusive approach to tax reform — one that doesn’t jeopardize local enterprise or dissuade Ghanaians from taking up insurance policies.
“Insurance penetration in Ghana is already low. These taxes will only deepen public apathy and further erode confidence in the system,” he said.
Industry insiders share his concerns, warning that the VAT policy could stall recent efforts to revive trust in insurance products and expand access across the country.
As the implementation date nears, all eyes are on the presidency — will there be a reconsideration, or will the tax plan go ahead as proposed?
