Finance Ministry Considers VAT on Non-life Insurance Claims

Feb 28 , 2023

Officials of the Ministry of Finance are considering imposing a 15pc Value Added Tax (VAT) on non-life insurance claims paid by insurance companies, according to a bill up for discussion with stakeholders.

The bill, which was debated at the Ministry's headquarters on King George Street, could be a reversal of the exemption previously granted to insurers from paying VAT. Officials acknowledged that insurance companies had been exempted from paying VAT on non-life insurance claims for the past two decades, but noted that the insurance industry had since matured. However, representatives from some insurance companies see the move could discourage policyholders.

Wasihun Abate, the discussion leader and tax advisor, has given insurers two weeks to provide evidence supporting their argument, including data from other countries. It remains to be seen whether this proposed bill will be enacted and how it could impact both the insurance industry and policyholders in Ethiopia.

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Finance Ministry Considers VAT on Non-life Insurance Claims

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