Increase taxes on unhealthy commodities to cut healthcare costs – CSOs Urge Gov’t

Civil society organizations (CSOs) are urging the government to raise excise taxes on unhealthy commodities such as sugar-sweetened beverages, alcohol, and tobacco.

The CSOs argue that this move would help reduce the country’s healthcare burden and boost government revenue.

Labran Musah, Executive Director of Programmes at the Vision for Alternative Livelihood Development (VALD), emphasized the need for ongoing efforts to push for higher taxes on these products. According to Musah, these items, while popular for recreational use, have significant health consequences and environmental impacts.

“These products do not mean any good for anybody health-wise and even environmentally,” he said, pointing out that they contribute to diseases and healthcare costs.

Ghana has implemented taxes on these products in the past, but Mr. Musah believes more can be done. He referred to the 2013 budget, where the government introduced taxes on sugar-sweetened beverages and revised the excise duty tax on tobacco products to a hybrid system. However, he insists that the government must continue to innovate in its approach to tackling the health challenges posed by these commodities.

“Other countries are doing the same. They are reducing their healthcare costs and improving the health of their people through increased taxes,” the Executive Director noted.

Mr. Musah also dismissed concerns that raising taxes would have little impact on consumption due to the inelastic nature of the products.

“Even if people continue to use them, the government will still generate more revenue. The tax proceeds could be used to offset the medical costs associated with illnesses caused by these products,” he argued.

Richard Ameevor, Research Lead at Policy Innovate Africa, echoed the call for higher taxes, noting that the current benchmark of 50 percent excise duty is too low compared to other African countries.

“Botswana and Liberia have gone beyond the 50% mark,” Ameevor said.

He suggested a gradual increase in taxes, starting from 50 percent and moving towards 70 percent, in line with World Health Organization (WHO) recommendations.

Ameevor also highlighted the importance of reviewing the taxes annually, a practice followed by several countries, to account for inflation and exchange rate fluctuations. He explained that higher prices resulting from increased taxes would discourage consumption, ultimately helping to reduce the prevalence of non-communicable diseases in Ghana.

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