VAST Ghana: Urges Comprehensive Excise Tax Reforms 2027-2030

• VAST Ghana has urged the Ministry of Finance to implement comprehensive excise tax reforms in the 2027-2030 Budget to combat non-communicable diseases and fund healthcare.
• Proposed changes include extending hybrid excise tax to all alcoholic beverages, incorporating ABV principles, and adopting minimum pricing.
• Tobacco excise tax is recommended to increase significantly, aiming for 75% of retail price, alongside an ad valorem tax hike from 50% to 100%.
• VAST Ghana calls for the abolition of excise tax on e-cigarettes and e-liquids due to their prohibition under Ghana's Public Health Act 2012 (Act 851).
• A reintroduction of a 20% tax on fruit juices and a new hybrid excise tax for all sugar-sweetened beverages are also recommended.

The organization argues that Ghana's public health and fiscal frameworks should not simultaneously present prohibited products as taxable commodities within the excise tax system, as this undermines enforcement efforts and creates policy inconsistencies.

The Vision for Accelerated Sustainable Development Ghana (VAST Ghana) has formally urged the Ministry of Finance to implement comprehensive excise tax reforms within the upcoming 2027-2030 Budget Statement. This call, articulated in a statement disseminated to the Ghana News Agency by Ms. Jennifer Maame Ama Owusu, Communications Manager for VAST Ghana, emphasizes the critical need to address the rising prevalence of non-communicable diseases (NCDs) across the nation.

The organization advocates for these reforms as a strategic fiscal and public health priority. The proposed changes are intended not only to alleviate the burden of NCDs but also to safeguard vulnerable populations and generate sustainable domestic resources specifically for healthcare financing. VAST Ghana views the 2027-2030 budget cycle as a pivotal opportunity for Ghana to embed health taxation as a fundamental element of its fiscal policy, NCD prevention strategies, and long-term health financing mechanisms.

Among the key recommendations, VAST Ghana suggests expanding the hybrid excise tax structure to encompass all alcoholic beverages, including beer, wine, cider, and ready-to-drink products, rather than restricting it solely to spirits. This would be complemented by the integration of alcohol-by-volume (ABV) principles, ensuring that taxation is directly proportional to a product's alcohol content, alongside the adoption of a minimum pricing policy to bolster excise taxation efforts.

For tobacco products, the organization proposes a significant increase in the specific excise tax on cigarettes, raising it from GHc 0.28 to GHc 1.00 per stick. This adjustment aims to ensure that total taxes constitute 75 percent of the retail price. Additionally, VAST Ghana recommends an upward revision of the ad valorem tax from 50 percent to 100 percent, anticipating that these measures will substantially elevate cigarette prices, diminish affordability, and amplify the public health impact of tobacco taxation. Regarding sugar-sweetened beverages (SSBs), the proposal includes reintroducing a 20 percent tax on fruit juices and establishing a hybrid excise tax for all SSB products.

A notable recommendation from VAST Ghana concerns e-cigarettes and e-liquids, advocating for the complete abolition of excise taxation on these items. The rationale behind this is to enhance policy coherence, given that these products are currently prohibited under Ghana’s Public Health Act 2012 (Act 851). The organization argues that Ghana's public health and fiscal frameworks should not simultaneously present prohibited products as taxable commodities within the excise tax system, as this undermines enforcement efforts and creates policy inconsistencies.

Furthermore, VAST Ghana stresses the importance of earmarking a defined proportion of the revenue generated from taxes on tobacco, alcohol, SSBs, and other health-related taxes. These dedicated funds would be channeled towards supporting NCD prevention initiatives, health promotion campaigns, tobacco and alcohol control programs, and other critical health interventions such as the Ghana Medical Trust Fund and the Free Primary Healthcare policy. This approach aligns with global efforts, including the WHO’s '3 by 35' Initiative, which positions taxation as a central strategy for reducing NCDs and strengthening domestic financing for health.

These proposed VAST Ghana excise tax reforms for the 2027-2030 budget represent a significant shift in Ghana's approach to public health and fiscal policy. For businesses operating in the alcohol, tobacco, e-cigarette, and sugar-sweetened beverage sectors, these recommendations could lead to substantial changes in their operational costs, pricing strategies, and market dynamics. The potential abolition of e-cigarette taxes, for instance, while aligning with existing prohibition laws under the Public Health Act 2012 (Act 851), underscores a move towards greater regulatory clarity.

The broader implications extend to Ghana’s overall domestic resource mobilization strategy and its commitment to public health. By institutionalizing health taxation as a core component of fiscal policy, the nation aims to leverage economic tools to achieve health outcomes, demonstrating that well-designed health taxes can effectively reduce the consumption of harmful products while simultaneously generating essential public revenue. This strategic integration of health and fiscal policy offers a blueprint for sustainable development and improved public welfare.

Lawyers advising clients in the alcohol, tobacco, e-cigarette, and sugar-sweetened beverage sectors in Ghana should closely monitor these proposed excise tax reforms for the 2027-2030 budget. Potential changes include increased taxes, new hybrid structures, and the abolition of e-cigarette excise tax due to their prohibition under the Public Health Act 2012 (Act 851), which could significantly impact tax liabilities, compliance strategies, and market operations for affected businesses.

Source: Original reporting via Ghana News Agency