The Ministry of Health supports raising taxes on alcohol and cigarettes.
To earn an additional GH3.5 billion, the Ministry of Health is pressing for a hike in the excise taxes on three unhealthy consumer goods.
Tobacco, alcohol, and sugar-sweetened beverages have all been identified as three of the leading causes of non-communicable diseases (NCDs), which include cancer, hypertension, stroke, and diabetes.
The ministry also wants the money made from those particular levies to go toward managing NCDs, which have recently reached alarming levels in the nation and are responsible for 17,000 fatalities annually. Ministry of Health
At a conference yesterday in Accra to discuss a World Health Organization research on how such health taxes could improve health outcomes in controlling NCDs, the Minister of Health, Kwaku Agyeman-Manu, announced this.
As much as we acknowledge that the higher taxes on these goods may cause a decline in consumption, he added, “it also offers a good opportunity to expand fiscal space to support government priorities, including health-related interventions focusing on NCD prevention, early detection, and treatment to mitigate a huge financial burden on individuals and the state in the future.”
He claimed that the idea of a health tax was a potent tool for generating income that had been effectively applied in many nations. Ministry of Health
Health taxes entail the imposition of fees on goods that are considered to be unhealthy, such as alcohol, tobacco, and beverages with added sugar.
Proposals
“The ad valorem tax should be maintained while introducing a uniform specific excise tax on tobacco products, introducing a specific excise tax on alcoholic beverages (based on ethanol content), and introducing a specific excise tax on sugar-sweetened beverages (based on sugar content),” said Mr. Agyeman-Manu. Ministry of Health
The proposal put forth by the ministry also calls for the implementation of a specific excise tax that would raise the retail price of cigarettes by GH6 and alcoholic beverages by 20%, as well as the introduction of a specific excise tax that would raise taxes on beverages with added sugar by 20%.
The proposals, according to Mr. Agyeman-Manu, also met the ECOWAS requirement for a specific minimum excise tax of at least $0.40 per pack and generated an additional GH131 million in revenue. They would also reduce consumption by 26.6% in 2023 and prevent 34,600 deaths over the course of the current generation of Ghanaians. Ministry of Health
According to the government, implementing a particular excise tax to raise the retail price of alcoholic beverages by 20% would raise an additional GH2.4 billion in excise tax revenue, cut consumption by 7.6% in 2023, and prevent more than 44,000 deaths over a century.
The proposal also stated that raising taxes on sugar-sweetened beverages by enacting a specific excise tax to raise retail prices by 20% in the nation would bring in an additional GH1 billion in excise tax revenue, decrease consumption by 23.9% in 2023, and prevent 155,000 deaths over a 100-year period.
In contrast to the scenarios provided above, the health ministry considers that the proposed tax structures may encourage product reformulation and new marketing strategies, resulting in smaller tax collections and, possibly, larger drops in consumption.
Purpose
The NCD burden, according to Mr. Agyeman-Manu, is a worrying condition that necessitates more efforts from the government to provide these diseases with high-quality preventative, promotion, diagnostic, curative, rehabilitative, and palliative care services.
“The financing of NCDs, therefore, requires additional resources beyond the traditional annual government budget, and this calls for exploring innovative financing to increase domestic resources,” he added.
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