Complying with tax regulations often result in increased costs and a significant reduction in profits. In recent times, there has been cause to complain about the number of taxes businesses are being burdened with.
However, a coalition of civil society organisations (CSOs) has welcomed the of excise duty on products classified as unhealthy and potentially harmful.
The increase of taxes on alcoholic and tobacco products including sweetened drinks, also known as sin taxes, passed by parliament last month will serve as a disincentive for the availability, accessibility and affordability of sugar-sweetened beverages and other unhealthy commodities, such as tobacco, which in the long-run cause serious ill-health effects for users.
The coalition, known as the Ghana Non-Communicable Diseases (NCD), argues that increasing the sin taxes will save government millions through the National Health Insurance Scheme (NHIS).
The result of a shift from healthy foods to junk foods is seen in the rising rates of obesity, especially among children, as well as other diet-related NCDs. Obesity leads to comorbidities with other non-communicable diseases; such as cancer, mental illness, hypertension, bone diseases and cardiovascular disease.
As healthcare costs and deaths linked to these health-harming products keep increasing, this is the right intervention to protect young people, promote health outcomes, and guarantee sustainable financing for public health service delivery, National Coordinator of the coalition, Labram Musah, stated in lauding parliament for its recent passage of the Excise Duty Amendment bill 2022.
Meanwhile, a tax expert and Senior Lecturer at the University of Ghana-School of Law, Ali-Nakyea Abdallah, observed that the whole conversation around increasing sin taxes centres largely on revenue mobilization – an attitude that he said contributes to resistance from the business community.
The tax expert observed that the taxes in this case may not necessarily solve the health issues which CSOs are talking about.
He would have preferred broader stakeholder consultation prior to their increase, because he believes their increase is largely centred on revenue mobilization – a key requirement of the International Monetary Fund.
The increased taxation requires stakeholder engagement with the manufacturers, the taxpayers, the consumers and institutional bodies like the Food and Drug Authority and Ghana Standards Authority, he further stated.
