Vision for Accelerated Sustainable Development Ghana (VAST Ghana) has called for a comprehensive overhaul of Ghana’s excise tax regime. The organization urged the government to increase taxes on tobacco products, alcohol, and sugar-sweetened beverages. Their proposal aims to curb the growing burden of non-communicable diseases (NCDs) while boosting domestic revenue mobilization.
This appeal came during a stakeholder engagement organized by the Ministry of Finance. The meeting focused on the Draft Strategic Framework and Proposed Overarching Legislation for Non-Tax Revenue Mobilization and Management. This engagement is part of wider government efforts to strengthen domestic resource mobilization. It also seeks to improve public financial management and establish sustainable financing for national development.
The current excise tax framework in Ghana falls below international standards, according to VAST Ghana. They highlighted findings from various international and local reports, including World Health Organization (WHO) reports on alcohol and sugar-sweetened beverage taxes. The WHO recommends excise taxes make up at least 70% of the retail price of tobacco products, a benchmark Ghana has not yet reached. Excise taxes on alcohol and sugary drinks also remain below recommended levels.
Mr. Labram Musah, Executive Director of VAST Ghana, presented the organization's position. He emphasized the significant health and economic costs linked to tobacco use, harmful alcohol consumption, and excessive sugar intake. Mr. Musah stated that the rising prevalence of NCDs heavily burdens households, the healthcare system, and national productivity. This makes stronger health taxes both a public health and an economic necessity.
VAST Ghana cited the success of Ghana’s hybrid tobacco taxation system as proof that stronger excise taxes can both improve public health and generate significant government revenue. The introduction of a specific excise duty of GHS 0.28 per cigarette stick led to a more than 300% increase in tobacco excise revenue. This generated over GHS 700 million. The organization believes further tax increases could yield even greater financial gains and discourage the consumption of harmful products.
Among its key recommendations, VAST Ghana called for an immediate increase in the specific excise tax on cigarettes from GHS 0.28 per stick to GHS 1.00 per stick. This would be equivalent to GHS 20 per pack. This new rate would ensure total taxes account for at least 75% of the retail price. The organization also proposed an alcohol-by-volume (ABV)-based excise duty for alcoholic beverages. This would include a minimum specific duty of GHS 10 per liter of pure alcohol, with higher rates for stronger products.
Other suggestions include giving the Ghana Revenue Authority power to automatically adjust tobacco taxes annually. These adjustments would align with inflation and economic growth. VAST Ghana also recommended increasing the excise tax rate on 'akpeteshie' from 20% to 40%. They further advised removing tax exemptions on tobacco imports from ECOWAS member states and duty-free outlets. Modernizing Ghana’s excise tax stamp system is also crucial, as the current paper-based system is prone to counterfeiting.
VAST Ghana also proposed that a portion of the excise tax revenue be used to fund NCD prevention programs and broader health promotion initiatives. Such health taxes are increasingly important globally. They help governments reduce harmful product consumption while creating funds for healthcare. The organization described the stakeholder engagement as a vital platform for advancing discussions on sustainable financing. It also strengthens the role of fiscal policy in promoting economic development and public health.