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VALD Ghana, A4H call for benchmarking of taxes on SSBs and alcohol to inflation rate

Labram Musah, the Executive Director of Vision for Alternative Development (VALD) Ghana, has issued a resounding call for the benchmarking of taxes on Sugar-Sweetened Beverages (SSBs) and alcohol to the prevailing headline inflation rate in the country.

This comes amidst heightened concerns over the negative health impacts of excessive consumption of these products. With Ghana’s headline inflation currently standing at 42.2% as of May 2023, according to the Ghana Statistical Service (GSS), Musah asserts that adjusting taxes in line with inflation is a crucial step towards curbing consumption by making these products less affordable.

During an exclusive interview with norvanreports on June 15, 2023, Musah proposed a comprehensive taxation approach, suggesting an ad valorem tax of 50% or higher on tobacco, coupled with a specific tax of $0.02 cents. By linking taxes on SSBs and alcohol to inflation and adopting a more robust taxation structure on tobacco, Musah believes that the increased financial burden will discourage consumption and contribute to improved public health outcomes.

Addressing the National Stakeholders Meeting on Health Taxes and Implementation of the Excise Duty Amendment Act 2023 on Thursday, Musah emphasized that benchmarking taxes on SSBs and alcohol to inflation, along with the proposed tax structure on tobacco, will effectively limit accessibility and availability of these products to Ghanaians. By elevating the prices of these goods, consumers will be deterred from excessive consumption, ultimately reducing the associated health risks.

Furthermore, Musah urged the Ghanaian government to enact policies that prioritize the allocation of a significant percentage of tax revenues generated from SSBs, alcohol, and tobacco to bolster healthcare delivery in the country. This would serve as a vital step towards addressing the broader health implications and associated costs resulting from the consumption of these products. By earmarking a portion of the tax revenues, the government can proactively invest in healthcare infrastructure, prevention programs, and public awareness campaigns, ensuring the well-being of Ghanaian citizens.

The recently enacted Excise Duty Amendment Tax has already witnessed a 20% increase in taxes levied on alcoholic beverages, tobacco products, and SSBs. This regulatory measure aims to generate substantial revenue while simultaneously curbing consumption by making these goods less financially accessible. Processed fruit juice, cigars, mineral water, spirits, wines, including sparkling wine, are all subject to the amended tax, further highlighting the government’s commitment to addressing public health concerns through effective taxation.

It is worth noting that the implementation of Musah’s proposal would bring about significant changes in consumer behavior and have far-reaching implications for public health outcomes in Ghana. As the call for tax benchmarking gains traction, industry stakeholders, public health advocates, and the general public eagerly await the government’s response to these recommendations. The ability to strike a balance between revenue generation and health promotion will undoubtedly shape the future landscape of taxation policies on SSBs, alcohol, and tobacco in Ghana, setting an important precedent for other nations grappling with similar challenges.

Source: Norvan Reports

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