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Increase the prices of tobacco products through taxation to save lives

The Civil Society Organisations (CSOs) Actors led by the Vision for Alternative Development (VALD Ghana) and other allied institutions have called on the government to swiftly pass the Tobacco Excise Duty Amendment Bills in order to halt rampant deaths being caused by tobacco and alcohol.

Tobacco-related illnesses account for 3% of all deaths in the country. It costs Ghana GHȻ668 Million every year, equivalent to 0.2% of annual GDP to take care of tobacco-related illnesses.

More so, alcohol consumption is considered the leading cause of death in Ghana with over 200 health conditions linked to harmful alcohol use. It is obvious that every day someone dies of alcohol-related disease in Ghana.

The Executive Director of Programs Vision for Alternative Development Mr. Labram Musah who made this known at a press conference in Accra said their ultimate aim is to give heads to parliament on industry manipulation and to expose the industry’s interferences or tactics.

The last time Ghana passed an excise bill was in the 2015 Budget Statement which saw an increase in tobacco products from a pure ad valorem of 150% to 175%.

Even though every year, CSOs led by VALD Ghana continue to make tax proposals on unhealthy commodities through advocacy campaigns and actions.

It is indeed a sigh of relief that finally there has been a proposed reform in the excise taxes on health-harming products including cigarettes, alcohol, and SSBs.

Gladly the bill has passed through the first and second readings in Parliament and has been placed on the agenda of the Parliament to undergo consideration and third reading before the President will assent to it.

It is against this backdrop that CSO actors and its allied government institutions in tobacco control, taxation, and health have all been occasioned here to hold this press conference.

According to him, the final passage of the bill in its current state will demonstrate the commitment of the Government of Ghana to address one of the leading causes of non-communicable diseases such as cancer, cardiovascular diseases, and chronic obstructive lung disease.

Tobacco use, alcohol use, and sugar-sweetened beverages account for 17,000 deaths in Ghana each year.

“Cancers and other Non-communicable diseases are on the rise in Ghana and this ground-breaking proposed amendment bill will significantly reduce cigarette smoking among Ghanaians and save lives.

It will also increase the leadership that the government of Ghana has shown in recent times on health and NCDs,” he emphasized.

Increasing taxes on tobacco, alcohol, and sugar-sweetened beverages by implementing specific excise taxes can generate GHC 3.5 billion in additional excise tax revenue in 2023.

Another study by the Institute of Statistical, Social and Economic Research (ISSER) and VALD Ghana also indicated that if a specific tax system is adopted, with a minimum specific tax rate of US$0.02 per cigarette along with the ad valorem tax system, it will increase tobacco tax revenue by 114%, amounting to about GH¢111 million in just a year.

According to Mr. Labram Musah, the tobacco industry has even been complicit in—illicit trade in tobacco.

Stressing that, there are simple, low-cost, steps a state can take to minimize any revenue reductions from cigarette smuggling or smoker tax evasion.

“One particularly useful strategy is to implement high-tech tax stamps that cannot be counterfeited to enable enforcement officials to readily identify smuggled cigarettes. Gladly, Ghana is currently implementing tax stamps on tobacco, and alcohol.

Increasing the price of tobacco products through taxation is the most efficient way to keep them out of the hands of kids around the globe, which is exactly why Big Tobacco has so fiercely opposed taxation measures,” he added.

Dr. Alex Kombat Assistant Commissioner of Research & Policy of Ghana Revenue Authority who spoke on behalf Ghana Revenue Authority explained that people continue to consume these harmful products because they are not expensive to scare them.

And so the government/GRA has seen the need to put taxes on them to increase their prices to deter people from consuming them in large quantities.

Increasing taxes on tobacco, alcohol, and sugar-sweetened beverages by implementing specific excise taxes can generate GHC 3.5 billion in additional excise tax revenue in 2023.

Specifically, increasing tobacco taxes by introducing a specific excise tax of GHC 6 on cigarettes in Ghana will satisfy the ECOWAS directive of a specific minimum excise tax of at least US$0.40 per pack and generate an additional GHC 131 million in revenue while reducing consumption by 26.6 percent in 2023.

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As a measure to help rake in the needed revenue & check to smuggle these products, GRA introduced the Excise Tax Stamp. GRA excise revenue increased from GHc 731.65 million in 2021 to Ghc 830.52 million in 2022 an increase of 14%.

“GRA, therefore, finds this advocacy timely and is in full support of the Bills. It is our hope that the tobacco mixed regime will rake in the needed revenue and reduce consumption of the products

GRA, therefore, want the bills passed into law to help us meet our 2023 tax target of Ghc 105 billion and also help reduce consumption of these products drastically,” he stated.

The continued delay in passing the bill will negatively affect our target and revenue inflow since all these taxes have been targeted for revenue to be collected during the year effective January 1, 2023.





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