Civil Society Organizations in Ghana led by the Vision for Alternative Development (VALD Ghana) and the Ghana NCD Alliance have applauded President Nana Akufo-Addo for signing the Excise Duty Amendment Bill 2022 into law. Due to this law’s health promotional feature, the CSOs have also appealed to the government to earmark the revenue generated from the tax for better public health gains.
The Ministry of Finance, as part of Ghana’s 2023 Budget statement, proposed the Excise Duty Amendment Bill in November 2022. The bill, among others, outlined a tax increment on health-harming commodities, including tobacco, alcohol, and sugar-sweetened beverages. It is projected to raise an annual revenue of over GHC 3 billion if implemented to the latter.
Despite the fact that most discussions arising out of the excise bill have been primarily revenue inclined, it is worth noting that the Deputy Minister of Finance, Hon. Abena Osei-Asare, during the third reading of the excise bill in Parliament on March 31, 2023, highlighted the health component of the bill and urged other members of Parliament to vote in favor of the bill for public health interest.
In recent times, non-communicable diseases (NCDs) have topped the chart as the major global public health concern, killing over 41 million people annually, with over 94,000 of these deaths occurring in Ghana alone. Gaining center stage, the World Health Organization has identified five leading causes of NCDs worldwide – tobacco use, alcohol use, unhealthy diets, physical inactivity and air pollution; leading to chronic diseases such as diabetes, cancers, strokes, heart, kidney, lungs, and respiratory illnesses. Taxing these NCD-causing products are among the many NCD prevention and control measures recommended by the WHO best buys. Given that the Excise Duty Amendment Bill increases taxes on tobacco, alcohol and sugar-sweetened beverages, it is valid to say that the bill is in unison with Ghana’s global NCD commitments.
This is not the first time Ghana is amending the Excise Tax Law on tobacco and alcohol; however, it has taken the country almost a decade (2015 Budget Statement) to review the excise tax law on tobacco products. The introduction of taxes on sugar-sweetened beverages, on the other hand, is the first of its kind in Ghana, although as of May 2022, over eighty-five (85) countries, including South Africa, Zambia and Nigeria, had already introduced SSB taxes to curtail the prevalence of obesity, overweight and diet-related NCDs especially among children. The lack of regular adjustment in the prices of these products over time renders them very cheap and affordable.
A large body of evidence from these tax countries as well as various locally curated modeling reports, have shown that the implementation of taxes on these health-harming commodities are effective in reducing the availability, accessibility and affordability of the products, thereby reducing consumption among children, young people and other vulnerable groups in society. Besides reduced consumption, health promotional taxes improve health outcomes due to the minimal workload and burden on health facilities and staff.
In Ghana’s medium-term development framework (2022–2025), the National Development Planning Commission noting NCDs as a developmental menace, has projected a 30% reduction in the 94,400 NCD deaths by 2025. As much as we hope for this reduction to materialize, it is worth mentioning that this goal can only be achieved if workable strategies are adopted to curtail the health financing challenge of Ghana’s health system. In his foreword to the National NCD Policy 2022, the Minister for Health, Hon. Kwaku Agyeman-Manu, concludes that one of the biggest challenges in achieving our national NCD objectives is the lack of funding.
This health financing challenge was verified during a 2023 Community-Led Monitoring conducted in Greater Accra and Ashanti Regions by the Ghana NCD Alliance. The report showed significant dissatisfaction among consumers of health services, including people living with NCDs. The reported shortage of medicines and unavailability of essential medical devices, such as glucometers and sphygmomanometers, highlight the need for immediate health financing options. This is where the earmarking of health taxes comes in to allocate a good percentage of revenue from health taxes solely to finance health.
Earmarking means taking all or a portion of total revenue from a tax or group of taxes and setting it aside for a designated purpose, as opposed to collating all government revenue into one consolidated fund. CSOs call for conscious earmarking of the revenue to be generated via the excise duty amendment law. Countries that have earmarked health tax revenues have reported a sustainable source of funding for health interventions and projects.
The CSOs have thus applauded the government for heeding to its advocacy calls and taxing health-harming commodities to protect public health, “but we want to emphasize that maximum public health gains can only be achieved if the health tax revenue is earmarked,” they stated in a press statement.
Labram M. Musah
Executive Director of Programs: Vision for Alternative Development
National Coordinator: Ghana NCD Alliance
+233 (0) 243211854
labrammusah@gmail.com/ labrammusah@valdgh.org