The Member of Parliament for Abuakwa South, Dr. Kingsley Agyemang, has raised serious concerns over the government’s proposed taxation of general insurance services, warning that it could jeopardize the survival of Ghanaian-owned insurance firms and lead to significant job losses within the sector.
The Ghana Revenue Authority (GRA) has announced the introduction of a 15% Value Added Tax (VAT) on non-life insurance premiums, effective July 1, 2025. The new tax will apply to policies covering areas such as property, health, and travel, though motor insurance will remain exempt.
The policy forms part of measures outlined in the 2025 national budget aimed at broadening the tax base and increasing revenue for essential public services. In line with this, Enterprise Insurance has announced that it will implement the 15% VAT along with an additional 6% levy on all non-motor insurance policies, as mandated by the VAT (Amendment) Act, 2023 (Act 1107).
In a media interview, Dr. Agyemang issued an urgent appeal to President John Mahama to halt the rollout of the tax increases, describing them as a combined 21% tax burden on non-life insurance policies. He noted that the measure comes at a time when public interest in insurance remains worryingly low.
He cautioned that imposing such levies would not only discourage current and potential policyholders but could also drive smaller, local insurance providers—many of which already operate on narrow profit margins—into collapse.
“This policy will hit Ghanaian-owned businesses the hardest,” Dr. Agyemang warned. “If these companies fold, we’re not just losing businesses—we’re losing thousands of jobs and displacing skilled professionals.”
He further emphasized the strategic role of the insurance sector in ensuring economic stability and employment, pointing out that many of the most vulnerable companies are indigenous and form the backbone of the industry.
Dr. Agyemang urged President Mahama to suspend the planned tax and instead engage with industry stakeholders in constructive dialogue to explore more sustainable revenue strategies that do not endanger local enterprises or livelihoods.
“This is a time for inclusive policy-making,” he said. “Let us work together to support homegrown businesses—not tax them out of existence.”
His remarks come amid growing unease among players in the insurance industry, who fear the new tax regime could undermine recent efforts to increase insurance penetration and rebuild public trust in the sector.
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Source: myjoyonline
