Shift tax focus from essential services to harmful products – Economist urges gov’t
Development Economist and Research Fellow at the University of Ghana, Dr. George Domfeh, has urged the government to reevaluate its tax strategy by prioritizing taxes on products with negative health and social effects, such as alcohol and tobacco, instead of imposing new taxes on essential services.
In an engagement with Adom News on Wednesday, July 2, Dr. Domfeh expressed his concerns regarding the Ghana Revenue Authority’s introduction of a 15% Value Added Tax (VAT) on non-life insurance premiums, labelling the move as counterproductive, likely to discourage Ghanaians from purchasing necessary insurance policies.
“This is not the right direction,” Dr. Domfeh said. “Instead of burdening Ghanaians with taxes on essential services like insurance, the government should raise taxes on products like alcohol and tobacco to reduce their consumption.”
He emphasized that these harmful items are more appropriate targets for increased taxation than insurance, which serves as a vital tool for risk management and national development.
Dr. Domfeh further lamented the government’s decision to eliminate other revenue sources, such as the E-levy and the Betting Tax, which he believes could have provided sustainable revenue without placing additional burdens on consumers of essential services.
“Already, many Ghanaians do not insure their properties. If not for police enforcement, most people wouldn’t even insure their vehicles,” he remarked.
He warned that the introduction of this new tax could worsen the already low public interest in insurance, undermining long-term national goals on disaster preparedness, risk protection, and financial inclusion.
“Increasing the cost of insurance will only worsen the situation and reduce coverage,” he cautioned.
“Insurance is about protecting lives and livelihoods. Rather than pushing people away from it, we should be making it more accessible,” Dr. Domfeh added, urging the government to reconsider its fiscal priorities and adopt a more balanced approach that promotes economic growth while enhancing public welfare.
By: Novire Kuuyizie Francis
About The Author
