Deloitte Sounds Alarm on “Urgent System Overhaul”.
The ground is shaking beneath Ghana’s non-life insurance sector as a staggering 21.9% VAT rate is unleashed on general insurance products.
The government’s new tax law, aimed at filling its coffers, has sent shockwaves through the industry, with leading advisory firm Deloitte issuing a dire warning: act now or face ruinous penalties
A New Tax Era, A New Threat
As of July 2025, a sweeping new tax regime is in full effect. Following the passage of the VAT (Amendment) Act 2023, all non-life insurance products—excluding motor insurance—are now subject to an eye-watering 21% VAT, which when calculated, results in an effective tax rate of 21.9%.
This isn’t just a new line item on a balance sheet; it’s a call for a complete corporate and technological reset.
Wisdom Kpano, a tax partner at Deloitte Ghana, didn’t mince words at a recent industry forum. He delivered a stark message to insurers: your systems are not ready.
“Enterprise Resource Planning (ERP) systems must be reconfigured to reflect the VAT charges correctly. Without this, companies may fail to apply the correct taxes and could be liable for back payments and penalties,” he cautioned.
Kpano’s core message is clear: companies must undergo a Robust System Readiness Assessment. The survival of the sector, he insists, depends on it.
Beyond the Tech: A Call for Total Compliance
This isn’t just about updating software. Kpano emphasized that a company-wide cultural shift is needed to navigate this new landscape. He urged firms to beef up their internal controls and create clear lines of responsibility for their compliance teams.
“VAT is not just a finance issue—it affects operations, IT, legal, and even customer engagement. That’s why firms must take a holistic approach to implementation,” Kpano declared.
This directive is particularly critical for smaller firms, many of whom may lack the resources or expertise to meet these new, rigorous requirements in such a short timeframe.
Customers in the Crosshairs
The National Insurance Commission (NIC) is also weighing in. Commissioner Dr. Abiba Zakariah urged insurers to embrace the new VAT law but also sounded a warning about the potential fallout. She stressed that firms must not allow the new tax to erode customer trust.
“Insurers must ensure that the VAT implementation does not lead to customer dissatisfaction. It’s important to communicate clearly with policyholders and maintain transparency,” Dr. Zakariah advised.
This call for caution comes amid growing concerns that the new tax could discourage consumers and jeopardize the already low insurance penetration rates in Ghana.
The Bottom Line
For Ghana’s non-life insurance industry, the threat is no longer theoretical—it is an expensive and immediate reality.
With an effective tax rate of 21.9%, firms are facing a high-stakes race against the clock to upgrade their systems, train their staff, and, most importantly, reassure their clients.
The question now is not if the industry will change, but whether it can adapt fast enough to survive.
