CSOs advocate annual review of excise taxes on harmful products
CIVIL Society Organisations (CSOs) are advocating a periodical upward review of existing taxes on products under the Excise Duty Amendment Act, 2023 (Act 1093).
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The objective of the Act typically applied to products like alcohol, tobacco and sugary beverages is to discourage excessive consumption of these harmful products and to raise funds for development projects like healthcare, infrastructure and education.
They believe the government raising the tax rate at least once each year to keep pace with increases in inflation and income, as well
as exchange rate increases will significantly reduce the consumption of these harmful products.
It will also ensure a relative reduction in non-communicable disease (NCD) cases recorded in the country, as well as increase fund allocation and availability of adequate resources for the health sector.
“We are already seeing the consequences, such as the increasing number of health crises and facility closures due to the overuse of harmful products. The system cannot handle the growing number of people falling ill from these habits.
Therefore, it is critical for the government to consider practical solutions, including preventive measures, public awareness and aggressive taxation of harmful products,” the Executive Director of Programmes for the Vision for Alternative Development-Ghana (VALD), Dr Labram Musa, said.
Forum
He was speaking to the media on the sidelines of the National CSO dialogue on enhancing excise taxation in Ghana last Tuesday in Accra.
The dialogue, funded by Tax Justice Network Africa, was held on the theme: “Enhancing Excise Taxation for Public Health Protection and Revenue Mobilisation.”
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It brought together CSOs, including VALD, Revenue Mobilisation Africa (RMA) and CSOs Budget Forum, ActionAid Ghana and SEND Ghana to sensitise and dialogue on excise taxes and their positive impacts on the wealth and health of the nation.
Revenue mobilisation
Dr Musa said as the government prepares for the 2025 Budget Statement and Economic Policy in November this year, raising taxes on these harmful products could provide a critical revenue stream at a time when the country is facing major financial constraints.
"Government revenue is strained and one clear solution is to increase taxes on unhealthy commodities. These products offer no health benefits, and the taxes would not only generate revenue but also reduce healthcare costs by curbing the consumption of goods that lead to serious health issues such as cancer and other non-communicable diseases," he said.
He pointed to examples from other countries like Liberia, Mozambique, Lesotho, Botswana and Namibia, where similar taxes have been implemented successfully, improving public health and reducing the financial burden on healthcare systems.
He added that while some argue that people will continue to use these products despite higher taxes, the revenue gained can help offset the costs of treating the illnesses caused by their consumption.