Ghana government urged to increase taxes on tobacco and alcohol in 2020 Budget

Stakeholders fighting against the spread of Non-Communicable Diseases (NCDs) in the country are proposing an increment in taxes on tobacco, cigarette, alcohol and other sugar-sweetened products to increase their prices so as to make them unattractive for consumption.

“We’re holding this stakeholder engagement to discuss raising taxes on unhealthy products to improve and to devise a strategy to ensure that the best tax regime system is adopted to advance public health,” Mr Labram Musah, Programs Director of Vision for Alternative Development (VALD), said recently in Accra.

He said: ‘After this meeting, we will present a recommendation to the Ministry of Finance and Ministry of Health to increase sin-tax on tobacco, alcohol and sugar sweetened beverages (SSBs) for consideration in the 2020 budget statement.
Overweight, obesity, cancer, diabetes, cardiovascular and other non-communicable and chronic diseases, once considered as a problem only in high income countries, are now on the rise in low- and middle-income countries, including Ghana, and particularly in urban settings.

Evidence suggests that reducing the consumption of cigarette and other tobacco related products and alcohol reduce the risk of unhealthy weight gain in adults and other NCDs.

These products are generally consumed quickly and do not provide the same feeling of fullness that solid food provides such that consumers tend not to reduce intake of other foods sufficiently to compensate for the extra satisfaction provided by these unhealthy products.

The roundtable was held under the theme: “Tax on unhealthy commodities: key strategy to financing health and improve wellbeing of all”.

Other objectives of meeting was to come up with a common agenda and position to address the low cost of unhealthy commodities and support the Ministry of Health proposition to increase tax (sin-tax) on tobacco, alcohol and SSBs to finance the health sector.

Mr Musah said protecting people from the financial consequences of paying for health services out of their own pockets reduces the risk that people will be pushed into poverty because  unexpected illnesses requires them to use up their life savings, sell assets, or borrow; destroying their future and often those of their children.

Representatives of selected institutions, including the Ghana Revenue Authority, Food and Drugs Authority, Ghana Health Service and the Ministry of Health and others spoke on various topics that address issues of control, obstacles, and provided recommendations for action.

The global epidemic of Non-Communicable Diseases is widely acknowledged as a major development challenge in the 21st century, and a significant threat to achieving internationally agreed sustainable development goals.

The Ministry of Health and the Ghana Health Service suggested in their paper that Ghana should evolve towards allowing a mixed excise tax structure whereby a specific excise tax calculated per unit of the product, in addition to ad valorem excise tax calculated as a proportion of an adequate tax base.

“That specific taxation tends to lead to relatively high levels of prices as compared to ad valorem taxation due to under-invoicing, and thus is more appropriate for achieving tobacco control objectives,” they said in their presentation, adding  “we view the mixed excise tax system (hybrid) as a good compromise.

“This will also lead to a win-win situation for both public health and government revenue generation.”
The Foods and Drugs Authority’s position is that the consumption of unhealthy products affects the family and country as a whole, creating a number of socio-economic problem, as family disputes, broken homes, loss of family reputation, accidents, high crime rates, high school drop-out rates, unemployment and a financial burden on the family and country.

Alcohol and tobacco use and abuse among the public, places a burden on the nation’s health sector; putting a strain on health services and other resources.

It suggested that to ensure that higher taxes does not encourage smuggling, there should be effective government record keeping, improved border security, banking control to reduce money laundering, better communication among, customs, finance and other agencies involved in tax collection.

Source: GNA

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