VALD Ghana exposes Tobacco industry’s interferences in passage of the Excise Duty Amendment Act
The Vision for Alternative Development (VALD) Ghana has released a rapid report shedding light on the tobacco industry’s attempts to influence the passage of the Excise Duty Amendment Act (ACT 1093).
The pivotal legislation, enacted on March 31, 2023, and implemented on May 1, 2023, carries significant implications for tobacco products, alcoholic beverages, and sugar-sweetened beverages (SSBs).
According to VALD Ghana, the tobacco industry has a history of interfering with public health policies, particularly regarding tobacco taxation. The recent passage of the Excise Duty Amendment Act, 2023 witnessed the industry and its affiliated organizations employing various strategies to hinder the passage of the Act.
The industry, VALD further asserts, succeeded in delaying the passage of the Act, swaying the public against the Act, and influencing the inclusion of e-cigarettes as excisable products, highlighting the extent of their interference in shaping public health policies in Ghana.
This, VALD Ghana notes, demonstrates the need for comprehensive measures to protect public health regulations from undue industry influence.
Speaking at the report’s launch on Wednesday, November 8, 2023, Executive Director of Programmes for VALD Ghana, Labram Musah, underscored the tobacco industry’s stance on the Excise Duty Amendment Act. According to him, the tobacco sector in Ghana argued that the legislation, which increases excise duties on tobacco products, could potentially burden consumers with higher taxes, fostering illicit trade and tobacco product smuggling.
Additionally, the industry contended that heightened taxes might lead to increased unemployment. It also raised concerns about the government’s insensitivity to the industry’s needs.
The Excise Duty Amendment Tax, largely advocated by VALD, aims to generate substantial revenue while concurrently reducing the consumption of alcoholic beverages, tobacco products, and SSBs. The revised legislation since its passage, has resulted in a 20% increase in taxes on these products.
The Ghana Revenue Authority (GRA) anticipates a tax revenue of GHS 455 million from SSBs, alcohol, and tobacco for the year 2023.
Per the report made available to norvanreports, the specific interferences made by the tobacco industry in hindrance to the passage of the Excise Duty Amendment Act are as follows:
- Tobacco Industry Frontiers and Allied Organizations in Ghana: The tobacco industry often collaborates with third-party organizations to advance their interest. In Ghana, organizations like the American Chambers of Commerce Ghana, the Harm Reduction Alliance of Ghana (HRAG), and the Institute of Liberty, Policy, and Innovation (ILAPI) have been identified to have played roles in promoting industry interest and delaying the swift passage of the Act in the country.
- Economic Exaggeration Tactics: The American Chamber of Commerce (AmCham) exaggerated the negative economic impact of the proposed tax policy by citing potential job losses (labour concerns) and the high possibility of total business shutdowns, downplaying the significance of excise taxes. These tactics were similar to AmCham’s approaches in other countries, aiming to deter tobacco tax increases.
- Delay in Progress on Excise Taxes: British American Tobacco (BAT) Ghana sought to safeguard its interests by submitting counterarguments that highlighted the dire consequences of excise tax increases. They argued that illicit trade accounted for a significant portion of the market, leading to revenue losses and other economic challenges.
- Swaying and Influencing Public Opinion: Industry-allied organizations promoted tobacco harm reduction policies and e-cigarettes as the gold standard alternatives to taxation. Their argument sought to undermine the efficacy of excise tax increases. The tobacco industry allied organizations asserted that this change will lead to more financial hardship without delivering tangible benefits to the public which is refuted as other countries are benefiting significantly in terms of public health impact and government revenue generation.
- Public Opposition Against Proposed Excise Taxes: The industry exploited the economic crises climate and argued against further tax increments. They argued that citizens at the time were overburdened with taxes, including some nuisance taxes. Public sentiments influenced by industry misinformation caused opposition to increased taxes; this posed a significant challenge to the passage of the higher rates and the amendments in general.
- Promotion of E-Cigarettes and Policy Influence: British American Tobacco (BAT) and other industry-allied organizations pushed for the inclusion of e-cigarettes in the Excise Duty Amendment Act. They framed e-cigarettes as a safer smoking alternative despite the availability of evidence that indicates serious health risks associated with the product. They staged press conferences, press releases, and webinars, strategically timed to coincide with parliamentary discussions, to gain public and stakeholder support for e-cigarette taxation in Ghana. The Tobacco Control Measures of the Public Health Act (Act 851) fortunately has legalized non-tobacco products for treatment of addiction/cessation purposes only.
To prevent the tobacco industry from undermining future tobacco control efforts and the implementation of current policies, VALD has made the following recommendations:
- The Ministry of Health (MOH) should implement a robust code of conduct to safeguard public health policies from industry interference.
- Stakeholders including MoH, MoF, GRA, FDA, WHO Ghana and CSOs should urgently meet to discuss and review the inclusion of e-cigarettes as an excisable product which goes contrary to the Public Health Act (Act 851).
- Through relevant stakeholders, the government should facilitate the development of a Ghana-specific industry argument and public health responses to counter the arguments
- The MOH and its agencies must increase and regularize consistent nationwide public education campaigns in collaboration with relevant stakeholders to raise awareness on the dangers of consuming tobacco products and the WHO FCTC Article 5.3 guidelines.
- Civil Society Organizations should alert and engage with the Ministry of Finance (MOF), MOH, and the Parliamentary Select Committee on Health plus other influential stakeholders; highlighting the activities of the industry which contravene WHO FCTC Article 5.3 guidelines.
- MOH should facilitate inter-agency collaboration among government and non-government stakeholders to strengthen the enforcement and implementation of existing tobacco control measures and regulations in Ghana.
- CSOs led by VALD and identified expert researchers should initiate and undertake further research to unveil the gains of industry-allied and front groups from prioritizing industry interests over public health benefits
Ghana’s efforts to control tobacco use have faced obstacles, including industry interference, despite its adoption of the WHO Framework Convention on Tobacco Control (WHO FCTC) and relevant legislation.
The report emphasizes that raising taxes on tobacco products is a highly effective public health strategy, as it significantly curtails tobacco consumption and its associated health risks.
Notably, price increases resulting from substantial tobacco excise taxes have a swift impact on reducing affordability and, subsequently, tobacco consumption.
The report underscores the significance of Article 6 of the WHO FCTC, which calls for the use of taxation as a powerful tool to increase tobacco product prices and discourage consumption. It highlights the win-win nature of this policy, promoting public health and boosting government revenues.
The WHO-FCTC Article 6 guidelines recommend adjusting tax rates periodically to prevent tobacco products from becoming more affordable as consumer income rises.
Despite its potential benefits, the adoption and implementation of Article 6 in countries like Ghana have been slower compared to other FCTC policies.
