VAST-Ghana recommends immediate increases in tobacco, alcohol prices
The Vision for Accelerated Sustainable Development, Ghana (VAST-Ghana) has recommended to the Ministry of Finance for the immediate increase in the specific excise tax on cigarettes from GH¢0.28 per stick to GH¢1.00 per stick.
This would ensure that the total taxes reach at least 75 per cent of the retail price of cigarettes while the rate of Akpeteshie is also reviewed upward from 20 per cent to 40 per cent.
The VAST-Ghana said these measures would help reduced the consumption of the products to improve the health and social wellbeing of the vulnerable population, particularly children and the poor.
The recommendations were made in a proposal submitted by a team of VAST-Ghana staff led by Mr Labram Musah, the Executive Director of the public health civil society organisation to the Ministry of Finance at a stakeholder engagement.
The engagement was convened by the Ministry to solicit inputs into the Draft Strategic Framework and Proposed Overarching Legislation for Non-Tax Revenue (NTR) Mobilization and Management.
Speaking in an interview with the Ghana News Agency, Mr Musah said there were reports that provided evidence that Ghana’s current excise tax regime remained below international best-practice standards and below the WHO recommendation that excise taxes should constitute at least 70 per cent of the retail price.
In addition, the excise tax framework for alcohol and sugar-sweetened beverages remained below internationally recommended benchmarks for both public health impact and revenue generation.
He said the current alcohol excise levels also fell short of WHO best-practice benchmarks (the absence of an ABV-based specific duty), which meant that higher-strength products were not taxed proportionally to the harm they cause.
“Similarly, Ghana’s sugar-sweetened beverage tax is not linked to sugar content, despite growing global evidence that sugar-based tax structures are more effective in encouraging product reformulation, reducing sugar consumption, and achieving meaningful public health gains,” he stated.
The Executive Director said VAST Ghana at the meeting highlighted the success of Ghana’s hybrid tobacco taxation system, noting that the introduction of a specific excise duty of 0.28 pesewas per cigarette stick contributed to an increase of more than 300 per cent (over GH¢700 million) in tobacco excise revenue.
“We presented this as evidence that further tax increases could generate even greater revenue gains while advancing public health objectives,” he stated.
He said on the excise tax stamp, they pointed out that the paper-based stamps were vulnerable to counterfeiting, reuse, damage, and manual verification challenges, which undermined tax administration, enforcement efforts, and lost revenue.
The Ministry of Finance was urged to transition to a digital system and a track and trace system that is mainstream within the WHO FCTC Article 15 and the Protocol to Eliminate Illicit Trade in Tobacco Products, as it would support the detection of illicit trade and provide real-time data for regulatory and enforcement agencies.
Mr Musah said the key issue raised by VAST Ghana related to the taxation of electronic cigarettes and e-liquids.
He stated that Ghana’s Public Health Act, 2012, provides the legal basis for prohibiting these products, and as such, taxing products that are legally banned creates policy inconsistencies and may inadvertently legitimize their presence in the market.
He said VAST Ghana insisted that removing taxes on prohibited products would strengthen regulatory enforcement and eliminate opportunities for industry actors to use taxation as a basis for advocating market acceptance.
Other recommendations they submitted were amendment to the excise tax on alcohol to introduce a specific excise duty component calculated based on alcohol by volume (ABV) per litre of pure alcohol, applied in addition to an ad valorem component.
A minimum specific duty of GHc10.00 per litre of alcohol should be established for all alcoholic beverages as a floor, with the rate rising proportionally for products above 15 per cent ABV.
They submitted that the Ghana Revenue Authority should be granted the power to automatically adjust tobacco taxes annually based on inflation and economic growth to prevent tobacco, alcohol, and sugar-sweetened beverages from becoming more affordable over time.
The Ministry of Finance should establish a minimum specific excise duty equivalent to at least $2 per pack of 20 cigarettes while removing tax exemptions on tobacco imports originating from ECOWAS member states and duty-free outlets,
The VAST-Ghana recommended that a portion of the excise tax revenue should be dedicated to finance noncommunicable disease prevention, and broader health promotion initiatives.
Mr Musah expressed happiness that the meeting provided an important platform for VAST Ghana to contribute to national discussions on sustainable financing and public financial management while reinforcing the role of health taxes in advancing both public health and economic development objectives in Ghana.
Source: GNA