CSOs call on Parliament to pass Excise Duty Amendment Bill

Ghana Parliament

A number of civil society organisations (CSOs) have called on Parliament to expedite action on the passage of the Excise Duty Amendment Bill to avert tobacco, alcohol and sugar related diseases and death.

The organisations are the Vision for Alternative Development, Ghana NCD Alliance, Tax Advocacy Network for Health Promotion, Community Health Support Team, Jaishi Youth Initiative, and Revenue Mobilisation Africa, among others.

They commended the Ministry of Finance for taking a bold step to include in the 2023 Budget Statement an Excise Tax on health-harming products such as tobacco, alcohol and sugar sweetened-beverages (SSBs), which was presented to Parliament in November, 2022.

This was in a statement signed by Mr Labram Musah, the Executive Director of Programmes of the Vision for Alternative Development and copied the Ghana News Agency.

It said: “We are delighted that our members of parliament largely spoke in favour of the proposed bill, during the second reading of the Excise Duty Amendment Bill in Parliament.

“We appreciate the fact that, apart from the revenue government would accrue to advance social and economic development, the debate for the proposed excise tax largely centered on the health consequences leading to the increasing rate of non-communicable diseases (NCDs).”

The statement said the rise in NCDs was as a result of the affordability of tobacco, alcohol and SSBs, leading to diseases such as diabetes, cancers, cardiovascular diseases, heart disease, liver and lungs diseases and mental health, among others.

“This for us from the civil society, academic and development institutions is an indication of the fact that government is looking at the evidence and public health interest as against the interest of few industry players, who in many cases exports the profits to their countries,” it stated.
It said the proposal to increase taxes on these unhealthy products was long overdue, the last time an amendment was made to adjust taxes on tobacco products was in the 2015 budget statement, which rose the excise tax from 150 per cent to 175 per cent.

“Unfortunately, because this was an ad valorem component which are largely manipulated by the industry and does not really account for inflation, the prices of cigarettes continued to remain relatively cheap on the Ghanaian market, increasing the accessibility and exposure to children and young people as well as the poor. The economy also loses huge chunk of revenue due to under declaration by the industry,” the statement said.

It stated that the proposed excise tax on tobacco, currently before Parliament is a combination of the ad valorem and specific tax – a mixed tax structure, adding that; “This is what we are particularly enthused about.

“A study by the VALD-Ghana and the Institute of Statistical, Social And Economic Research, observed that a mixed tax structure of 175 per cent ad valorem with a specific component of GH₵3 per cigarette pack would increase the average retail price by 96 per cent.

“This would decrease cigarette consumption by 22.5 per cent, and increase excise tax revenue by 499.5 per cent, with an overall tobacco-related tax revenue by 159.7 per cent.

“Another analysis (unpolished) by WHO-FCTC, VALD Ghana, UNDP, Research Unit of the Economics of Excisable Products (REEP) among others suggest that increasing tobacco taxes by introducing a specific excise tax of GHC6 on cigarettes in Ghana will satisfy the ECOWAS directive of a specific minimum excise tax of at least US$0.40 per pack will generate an additional GHC131 million in revenue while reducing consumption by 26.6 per cent in 2023. This mechanism would avert some 34,600 deaths during the life spans of Ghanaians living now.”

The statement said it was against this backdrop that the CSOs were calling on the Members of Parliament to speed up the passage of the Excise Duty Amendment Bill while urging the citizenry to support the recommendations made in a study report dubbed, “Economics of Tobacco Taxation/Control in Ghana” by VALD-Ghana to improve public health and raise additional resources to support the “Ghana Beyond Aid” agenda.

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