MP for New Juaben South, Michael Okyere Baafi
A former Deputy Minister of Trade and Industry, Michael Okyere Baafi, has raised concerns over what he describes as a deliberate attempt by the National Democratic Congress (NDC) government to create a false impression regarding the collection of Value Added Tax (VAT) on third-party motor insurance.
Speaking to GhanaWeb on Tuesday, March 18, 2025, the MP for New Juaben South emphasised that while a law existed for the collection of the said tax, it was never implemented under the erstwhile New Patriotic Party (NPP) government, contrary to the impression being created by the current government.
“I was not satisfied at all because I wanted the minister to clarify the issue well for us to understand. He created the impression to the Ghanaian people that there was a VAT component on third-party motor insurance, which, in actual fact was not so. As a matter of fact, the reality is that the law was passed; however, it was not implemented. As far as there was no implementation, you cannot come to the House of Parliament to create the impression that the law was in existence and had been implemented.
“That is what I sought him to clarify, but he was not able to do justice to it, and that is the problem we have. We want to put it on record that in Ghana, as we stand here, there is no VAT on third-party motor insurance, and that is the fact. This is a house of records; it can be checked anywhere. There is no VAT on third-party motor insurance, so the minister has no right to deceive the public like that. That is the clarity we wanted from the minister, but he was not able to make it clear for us,” he stated.
The comment by the MP was in response to a question he posed to the Minister of Finance, Dr Cassiel Ato Forson, when he appeared before Parliament on Tuesday to respond to questions.
While the MP sought to question the minister on whether the tax policy was actually implemented, he accused Dr Ato Forson of being evasive in his answer and insisted that the collection of VAT on third-party motor insurance has never been practiced in Ghana.
In the 2025 Budget Statement and Economic Policy, presented to the Parliament of Ghana on March 11, 2025, by Finance Minister Dr Cassiel Ato Forson, the government announced the repeal of the Value Added Tax (VAT) on third-party motor insurance.
This decision was part of a broader set of tax relief measures aimed at easing the financial burdens on Ghanaians and fulfilling campaign promises made by the National Democratic Congress (NDC) during the 2024 Election.
The announcement has been met with mixed reactions, with the opposition New Patriotic Party (NPP) arguing that the tax had not been fully implemented under their administration, questioning the NDC’s narrative of abolishing the policy.
GA/AE
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