"VAST Ghana Pushes for Retention and Hike in Excise Taxes on Tobacco, Alcohol and SSBs in Mid-Year Budget Review"

VAST Ghana Pushes for Retention and Hike in Excise Taxes on Tobacco, Alcohol and SSBs in Mid-Year Budget Review

Health-based Civil Society Organisation, Vision for Accelerated Sustainable Development Ghana (VAST Ghana) has urged the Minister of Finance, Dr Cassiel Ato Forson, to retain and consider an upward review of existing excise taxes on tobacco, alcohol, and Sugar-Sweetened Beverages (SSBs) in the upcoming 2025 Mid-Year Budget Review.

In a formal proposal submitted to the Ministry, the health-focused civil society organisation emphasised that Ghana’s excise regime, introduced through the Excise Duty Amendment Act, 2023, has delivered significant gains in both public health outcomes and domestic revenue mobilisation.

VAST Ghana contends that any rollback of the excise tax rates—currently set at 20% for SSBs, between 25% and 47.5% for alcohol, and a hybrid specific-ad valorem structure for tobacco—would reverse measurable progress in reducing non-communicable diseases (NCDs) and undermine Ghana’s fiscal stability.

Soaring NCDs and Revenue Mobilisation

Citing alarming health statistics, the organisation highlighted that NCDs account for 45% of all deaths in Ghana, with 43% of adults overweight or obese, and rising cases of alcohol-related diseases. Each year, Ghana records over 37,000 deaths linked to alcohol-related conditions, according to World Health Organisation (WHO) data.

The 2023 implementation of the Excise Duty Amendment Act, VAST Ghana stressed, has been transformational. Data from the Ghana Revenue Authority (GRA) shows excise revenue from SSBs alone increasing from GHS 735 million in 2022 to GHS 1.3 billion in 2023. Revenue from tobacco products also more than doubled, surging from GHS 220.8 million to GHS 454.5 million in the same period.

“This revenue growth illustrates not only the effectiveness of the excise tax system but also its potential to finance public health initiatives that combat the very NCDs being fuelled by these products,” VAST Ghana noted in its submission.

Calls for Earmarking of Revenues

VAST Ghana has also proposed earmarking a percentage of the excise tax revenue specifically for public health interventions and the Ghana Medical Trust Fund—established to support the treatment of NCDs. It warned that lowering the excise rates would not only lead to increased disease burden but also threaten the sustainability of the Trust Fund.

“The cost of treatment will override the amount invested under the Fund if excise tax rates are reduced,” the organisation stated.

Countering Industry Arguments

While acknowledging opposition from industry stakeholders, who argue that excise taxes affect jobs, investment and promote illicit trade, VAST Ghana described these claims as exaggerated and lacking in evidence. It maintained that robust enforcement mechanisms—such as excise stamps and customs procedures—are already in place to prevent revenue leakage.

The organisation further noted that health taxes are “progressive in outcomes,” disproportionately benefitting lower-income households through significant reductions in harmful consumption.

Global and Regional Policy Commitments

The proposal invoked Ghana’s international commitments under the WHO Framework Convention on Tobacco Control (FCTC) and the ECOWAS Directive on harmonised excise tax minimums. It stressed that any policy reversal would “send the wrong signal to both investors and the public about Ghana’s resolve to meet international obligations.”

VAST Ghana concluded its proposal with a series of firm recommendations, including:

• Maintaining current excise tax rates on tobacco, alcohol, and SSBs

• Considering annual inflation-adjusted increases to the excise rates

• Allocating a portion of revenues to public health and the Ghana Medical Trust Fund

• Strengthening enforcement and anti-illicit trade systems

• Establishing mechanisms for tracking and evaluating the tax’s impact on health and consumption

“In the face of industry pressure, Ghana must stand firm in prioritising public health over commercial interests. Maintaining and reinforcing the excise tax policy is not only a matter of fiscal prudence, it is a moral and developmental imperative,” said Labram Musah, Executive Director of VAST Ghana.