The Ghanaian government will abolish the 20 percent excise duty on locally manufactured fruit juices. Finance Minister Dr. Cassiel Ato Forson announced this decision during the 2026 Mid-Year Budget Review in Parliament on Thursday, July 23. This measure forms part of a wider package of tax reforms designed to support agro-processing, generate employment, and fortify the domestic industry.
This specific tax relief aims to encourage value addition within the agricultural sector. By reducing the tax burden on local manufacturers, the government expects to make locally processed products more competitive. The 20 percent excise duty was initially introduced in 2023, and its removal is intended to directly benefit local fruit juice producers.
The abolition of this duty is a key component of the proposed Excise Duty Bill. This bill seeks to improve tax administration, close revenue leakages, and promote local production across various sectors. The government's focus on agro-processing aligns with broader economic strategies to diversify the economy and reduce reliance on raw material exports.
Dr. Forson explained that the decision is specifically intended to support agro-processing and job creation. He highlighted the government's commitment to fostering an environment where local businesses can thrive and contribute significantly to the national economy. This policy change reflects a strategic shift towards incentivizing domestic manufacturing.
Beyond the fruit juice tax relief, the Finance Minister also identified significant weaknesses in the country’s excise tax system, particularly concerning wines and spirits. An analysis of imports between 2023 and 2025 revealed that wines and spirits with a taxable value exceeding GHS 5 billion entered Ghana. However, approximately 78 percent of this value bypassed excise duty through various customs procedures.
Dr. Forson stated that almost four out of every five cedis of potential excise tax on wine and spirits escaped the tax net. He described this situation as neither efficient nor sustainable, emphasizing the urgent need for change. This substantial leakage represents a significant loss of potential government revenue.
To address this problem, the Excise Duty Bill proposes a hybrid tax system for wines and spirits. This new system will combine value-based and quantity-based taxation. The aim is to reduce undervaluation and misclassification, thereby ensuring a more equitable and effective collection of excise duties. This reform seeks to plug revenue holes and ensure fairness in the tax system.
The government's move to scrap the excise duty on local fruit juice could stimulate investment in the agro-processing sector. This could lead to increased production capacity and more employment opportunities in rural areas. Businesses in the fruit juice industry will likely respond positively to the reduced operational costs, potentially passing savings to consumers or reinvesting in expansion.
Investors and industry stakeholders will closely monitor the implementation of the Excise Duty Bill. The effectiveness of the hybrid tax system for wines and spirits will also be a key area of focus. These reforms collectively aim to create a more robust and equitable tax environment, supporting Ghana's economic development goals.