- VAST Ghana Backs Excise Tax Bill but Demands Tougher Alcohol, Tobacco and Sugary-Drink Reforms
Vision for Accelerated Sustainable Development Ghana has welcomed Parliament’s passage of the Excise Tax Bill 2026, describing it as an important step towards using fiscal policy not only to raise revenue but also to reduce the health and economic costs associated with harmful consumption.
The civil society organisation, however, says the legislation should go further.
In a statement issued on Friday, VAST Ghana called for a broader hybrid tax regime for alcoholic beverages, stronger tobacco excise duties, a reconsideration of exemptions for locally produced fruit juices and greater policy consistency in the treatment of electronic cigarettes.
“The passage of this legislation marks another important milestone in Ghana’s journey toward using fiscal policy not only as a revenue mobilisation tool, but also as a strategic instrument for protecting public health, promoting responsible consumption, and strengthening sustainable domestic financing for health,” the organisation said.
VAST Ghana’s intervention comes at a time when the country is grappling with a rising burden of non-communicable diseases, higher healthcare costs and pressure on external financing for the health sector.
According to the organisation, NCDs account for about 45% of deaths in Ghana, increasing the pressure on households and the public health system.
Cardiovascular disease, cancer, diabetes and chronic respiratory conditions often require long-term and expensive treatment, making prevention a fiscal issue as much as a health one.
That is why VAST Ghana is urging government to view so-called health taxes as a dual-purpose policy tool.
Higher excise duties can generate immediate revenue while also discouraging consumption of products associated with preventable illness.
The organisation linked the reform to the World Health Organization’s “3 by 35 Initiative”, which advocates measures to increase the real prices of tobacco, alcohol and sugar-sweetened beverages by at least 50% by 2035.
For Ghana, the attraction of such taxes is straightforward.
If consumption falls, future pressure on healthcare expenditure may decline.
If consumption does not fall immediately, government still mobilises additional revenue that can potentially be directed towards health-sector priorities.
One of the most significant elements welcomed by VAST Ghana is the shift in the taxation of spirits away from a purely ad valorem system towards a hybrid structure combining specific and value-based rates.
Under an ad valorem regime, the tax burden is linked to the price of the product.
That means consumers seeking to avoid higher taxes can sometimes switch to cheaper alcoholic beverages.
A specific component, by contrast, imposes a tax based on the quantity or alcohol content of the product, reducing the scope for consumers to escape the tax merely by buying a lower-priced brand.
VAST Ghana argues that combining the two systems can therefore strengthen both the public-health and revenue impact of alcohol taxation.
It cited international experience in countries including Thailand and the Philippines as examples of jurisdictions that have adopted hybrid excise structures.
But the organisation wants the reform extended beyond spirits.
It is calling for beer, wine, cider and ready-to-drink alcoholic beverages to eventually be brought under a consistent hybrid framework.
The objective would be to reduce substitution between different categories of alcohol while widening the tax base.
VAST Ghana also wants policymakers to consider a minimum unit pricing regime.
Such a system would establish a floor price below which alcoholic beverages cannot legally be sold, making the cheapest high-alcohol products less affordable.
The organisation’s concern is that taxation alone may be less effective if producers or retailers absorb part of the tax or continue offering very low-cost alcohol.
Minimum pricing could therefore reinforce the behaviour-change objective of the excise regime.
VAST Ghana was less supportive of the removal of the 20% excise tax on locally produced natural fruit juices.
While acknowledging government’s intention to support domestic manufacturers, it warned that the exemption risks undermining the health rationale of the broader excise policy.
“Fruit juices, particularly those containing free or naturally occurring concentrated sugars, can still contribute significantly to excessive sugar intake and increase the risk of NCDs,” VAST Ghana said.
Its argument is that the public-health impact of a beverage depends more on its sugar content than on whether it was produced locally or imported.
The organisation is therefore proposing a tax regime based on free-sugar content.
Under such a model, beverages with higher sugar concentrations would face higher taxation regardless of origin, while manufacturers would have a financial incentive to reformulate products and reduce sugar levels.
VAST Ghana also warned that any exemption system would require strong enforcement.
Without clear definitions and product standards, manufacturers could potentially alter classifications or marketing descriptions in order to secure more favourable tax treatment.
The organisation therefore wants mandatory free-sugar labelling and stronger compliance oversight from the Food and Drugs Authority.
Electronic cigarettes represent another area where VAST Ghana believes the law requires greater consistency.
The organisation questioned why electronic cigarettes remain within the excise tax framework when, in its interpretation, Ghana’s Public Health Act, 2012 and Tobacco Control Regulations, 2016 prohibit electronic cigarettes and related products for recreational use.
“A product that is prohibited should not simultaneously appear within the country’s excise tax framework,” VAST Ghana said.
Its concern is that imposing an excise tax on a prohibited product could be interpreted by industry participants as implicit recognition of a legitimate market.
VAST Ghana therefore wants electronic cigarettes removed from the excise schedule, while enforcement of the applicable restrictions is strengthened.
The organisation’s strongest criticism, however, relates to tobacco.
VAST Ghana said the failure to strengthen tobacco excise duties represents a missed opportunity in a country where smoking-related health and economic costs remain substantial.
It estimates that tobacco use causes more than 6,700 deaths annually in Ghana and generates economic costs of more than GH¢668 million through healthcare spending and productivity losses.
The organisation also argues that Ghana’s current tobacco tax burden remains below the WHO benchmark that taxes should account for at least 70% of the retail price of the most popular cigarette brands.
VAST Ghana wants government to move closer to that threshold.
Its position is that higher tobacco taxation would reduce affordability, make smoking less attractive to younger people and encourage some existing smokers to quit.
The same policy could also generate additional fiscal revenue.
That combination is what makes tobacco excise particularly attractive from a public-finance perspective.
It is one of the few tax instruments where government can potentially raise more money while simultaneously seeking to reduce the size of the tax base over the longer term.
VAST Ghana is also urging government to consider earmarking a meaningful share of revenues from health-related excise taxes for NCD prevention, screening, health promotion and broader health-system strengthening.
The organisation believes such earmarking could help make the policy more visible and politically credible.
Citizens paying higher taxes on tobacco, alcohol or sugary beverages would be able to see a clearer connection between those revenues and spending designed to reduce the social costs associated with the products.
That could also help build support for future increases in health-related excise duties.
The wider policy challenge, however, is balancing competing objectives.
Government wants to raise revenue.
It also wants to support local manufacturing.
It needs to discourage harmful consumption without creating incentives for illicit trade.
And it must design tax structures that are enforceable and administratively practical.
Those objectives can sometimes conflict.
A large increase in excise duties may improve health outcomes but could also encourage smuggling if enforcement is weak.
An exemption for local producers may support domestic industry but weaken public-health objectives.
Taxing prohibited products may raise revenue but create regulatory ambiguity.
The effectiveness of the 2026 reforms will therefore depend heavily on policy coherence.
VAST Ghana’s intervention is essentially an argument that Ghana should stop treating excise taxes as ordinary revenue instruments and begin viewing them as part of a wider health-financing strategy.
That matters at a time when government is under pressure to mobilise more domestic resources.
External health financing has become less predictable, while the cost of treating chronic diseases continues to rise.
Health-related excises could therefore become an increasingly important source of domestic financing.
But the real test will be whether they change behaviour.
A tax that raises revenue without reducing harmful consumption may still have fiscal value.
A tax that reduces consumption but raises little revenue may still deliver public-health gains.
The strongest policy design is one that can achieve both.
That is the outcome VAST Ghana wants policymakers to pursue.
The organisation said it will continue engaging government, Parliament, academia, civil society, development partners and regulators as implementation of the new excise framework progresses.
Its broader message is that passage of the Bill should be treated as the beginning rather than the end of reform.
What matters next is how quickly government closes the remaining gaps, strengthens enforcement and ensures the tax system is aligned with the health outcomes it is supposed to support.
For Ghana, the debate is ultimately bigger than alcohol, cigarettes or sugary drinks.
It is about whether fiscal policy can be designed to prevent illness before the health system is forced to pay for it.
That will determine whether the new excise regime becomes merely another source of government revenue or a genuine public-health instrument capable of reducing the long-term economic burden of preventable disease.
