Government Moves to Exempt Motor Insurance from VAT
Finance Minister, Dr. Cassiel Ato Forson, has tabled a bill in Parliament seeking to amend the Value Added Tax (VAT) Act to exempt motor vehicle insurance from taxation, in line with a commitment made in the 2025 budget.
The proposed legislation, which aims to reduce the cost burden on motorists and improve insurance penetration, has been referred to the Finance Committee for further scrutiny.
“Honourable members, the bill on Value Added Tax amendment 2025 is accordingly read for the first time and referred to the Finance Committee for consideration and report,” said First Deputy Speaker Bernard Ahiafor.
The exemption, if passed, is expected to bolster the insurance sector by making policies more affordable, a move welcomed by industry players.
Analysts suggest it could also enhance compliance with mandatory motor insurance requirements, while easing financial pressures on vehicle owners.
Parliamentary deliberations on the bill are expected in the coming weeks.
