In a significant move, the Minister for Finance, Dr. Cassiel Ato Baah Forson, has presented a bill to Parliament aimed at amending the Value Added Tax (VAT) Act.
The proposed amendment seeks to exempt the supply of motor vehicle insurance from VAT, effectively abolishing the tax on motor insurance policies as promised in the 2025 budget.
This development is expected to bring relief to motorists and insurance policyholders, who have been bearing the brunt of VAT on motor insurance premiums.Undoubtedly, by exempting motor insurance from VAT, the government aims to reduce the financial burden on citizens and promote a more equitable taxation system.
Following the presentation of the bill, the First Deputy Speaker, Bernard Ahiafor, referred it to the Finance Committee for consideration and reporting. Hon. Ahiafor stated, “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”.
The proposed amendment is now pending review by the Finance Committee, which will scrutinize the bill and provide recommendations before it is put to a vote. If passed, the amendment will come into effect, providing a welcome respite to motorists and insurance policyholders nationwide.
