Development Economist, Dr. George Domfeh, is urging the government to reconsider its tax strategy by shifting focus from essential services to products with adverse health and social impacts, such as alcohol and tobacco.
Speaking to Adom News, Dr. Domfeh criticised the recent introduction of a 15% Value Added Tax (VAT) on non-life insurance premiums, describing it as counterproductive and likely to discourage Ghanaians from purchasing insurance policies.
His concerns come in the wake of the Ghana Revenue Authority’s announcement that the new tax will take effect from July 1, 2025, and will apply to insurance products such as property, health, travel, and auto policies.
“This is not the right direction,” Dr. Domfeh said. “Instead of burdening Ghanaians with taxes on essential services like insurance, the government should raise taxes on products like alcohol and tobacco to reduce their consumption.”
He argued that these items, which have proven health and societal consequences, are more suitable targets for higher taxation, rather than insurance—a tool for risk mitigation and national development.
Dr. Domfeh also criticised the government for scrapping other sources of revenue, including the E-levy and the Betting Tax, which he said could have helped sustain the revenue stream without burdening consumers of necessary services.
“Already, many Ghanaians do not insure their properties. If not for police enforcement, most people wouldn’t even insure their vehicles,” he noted. “Increasing the cost of insurance will only worsen the situation and reduce coverage.”
He warned that the new tax could further erode public interest in insurance, undermining long-term national goals around financial inclusion, risk protection, and disaster preparedness.
“Insurance is about protecting lives and livelihoods. Rather than pushing people away from it, we should be making it more accessible,” Dr. Domfeh added.
He called on the government to revisit its fiscal priorities and adopt a more balanced approach that supports economic growth and public welfare.
Source: Jagri Boaz Binyinjom
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