- Ethiopia’s new VAT law introduced on July 4, 2024, is facing pushback due to inconsistencies and lack of clarity
- The new law includes traditionally exempt sectors like the insurance industry, which could hinder growth
- Insurers in Ethiopia previously enjoyed a blanket exemption, but the new law only exempts life and health insurance policies
- The 15% VAT on general insurance plans could impact premiums and payouts
- Uncertainty remains on how the new law will affect policyholders and insurers
- Insurers may cover the 15% levy through contractual agreements with policyholders
- There are concerns about retroactive implementation and how VAT will be deducted for re-insurers
- The low level of awareness of insurance in Ethiopia reflects in the industry’s low penetration rate
Source: theafricareport.com
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
