NEW COMPUTATION OF TAX ON INSURANCE PREMIUMS EFFECTIVE 1ST JANUARY 2026

We wish to inform you of important changes to the taxation structure applicable to insurance premiums in Ghana following recent statutory amendments, which take effect from 1st January 2026.
• Repeal of COVID-19 Health Recovery Levy
• No COVID-19 levy should be applied to any insurance policy with a renewal or inception date on or after 1st January 2026.
• VAT (Amendment) Act, 2025 (Act 1151)

We further wish to inform you that H.E. the President has assented to the VAT (Amendment) Act, 2025 (Act 1151), which introduces significant changes to the computation of taxes on insurance premiums:
• VAT is no longer chargeable on levy-inclusive values.
• VAT, NHIL, and GETFund Levies are now applied strictly on the Base Premium only, not on premium plus levies.
• As a result, the effective tax rate has been reduced from 21.9% to 20% of the base premium.

• Illustrative Example (New Tax Computation)

To provide clarity, below is an illustration of how insurance premium taxes will now be calculated under the new regime:
If the Base Premium is GHS 10,000:
• Base Premium: GHS 10,000
• NHIL (2.5%): GHS 250
• GETFund Levy (2.5%): GHS 250
• VAT (15%): GHS 1,500
Total Invoice Amount: GHS 12,000

What This Means
• Insurance premiums effective 1st January 2026 and beyond will be lower, reflecting the revised tax computation.
• Clients who may have already settled January 2026 premiums inclusive of the COVID-19 levy will receive the applicable refund or credit.