The Ghana Revenue Authority (GRA) has clarified that the 15% Value Added Tax (VAT) on non-life insurance premiums is not a new tax, but a reintroduction of a previously suspended levy under existing legislation.
Mr. David Lartey-Quarcoopome, Chief Revenue Officer at the GRA, explained that the tax originally existed under the VAT Act 870, which was passed years ago and included provisions for taxing non-life insurance products.
The tax was suspended by the New Patriotic Party (NPP) government in 2017, but later reintroduced through legislative amendments in 2023.
“This is not a new tax. When Act 870 was passed, insurance taxation was part of it. What we are doing now is enforcing an existing law that has been reactivated,” Mr. Lartey-Quarcoopome emphasized.
He noted that implementation had been deliberately delayed to give insurance companies and policyholders time to prepare.
The GRA has since been working closely with industry stakeholders to develop guidelines, including practice notes, to ensure a smooth rollout of the tax.
Crucially, the GRA confirmed that motor vehicle insurance premiums are exempt from the VAT.
Mr. Lartey-Quarcoopome clarified that while motor insurance falls under the category of non-life insurance, it has been specifically excluded from this tax application.
The reintroduction of the VAT on non-life insurance premiums is part of government efforts to broaden the tax base and enhance domestic revenue mobilisation, particularly within the formal financial and insurance sectors.
According to GRA officials, enforcing this levy is in line with national revenue goals and is designed to ensure consistency and fairness in the application of VAT across goods and services.
