Dr Godfred Seidu Jasaw, Member of Parliament (MP) for Wa East and a member of the Parliamentary Select Committee on Food, Agriculture and Cocoa Affairs, has iterated government’s preparedness to support the new tax structure on tobacco products to discourage smokers.
The Member of Parliament lauded Civil Society Organizations (CSOs) and institutions working for a tobacco tax reform, from ad-valorem to specific tax or mixed tax regime to control the challenges of tobacco consumption.
Dr Godfred Seidu Jasaw gave the assurance at a capacity workshop for government institutions and CSO actors on tobacco taxation, control and illicit trade in tobacco products. The workshop, which was organized by the Vision for Alternative Development (VALD) in collaboration with the Ghana Revenue Authority (GRA) and Tax Justice Network Africa (TJNA), was attended by some Members of Parliament and representatives from the Food and Drugs Authority (FDA), Ministry of Health, Ministry of Finance, and Ghana Revenue Authority (GRA).
Dr Olivia Boateng, Head of Tobacco and Substances Abuse and a WHO Framework Convention on Tobacco Control (WHO FCTC) focal person of the FDA noted that tobacco taxation is a strategy for effective control and reduction in the product use among lower-income groups and in preventing young people from starting to smoke.
“A tax increase that increases tobacco prices by 10 per cent decreases tobacco consumption by about four per cent in high-income countries and by up to eight per cent in most low and middle-income countries (WHO).
“Though progress in its implementation has been slow, the government of Ghana uses tobacco taxation to generate revenues. Currently, the government uses the ad-Valorem excise system which is based on the ex-factory price or cost, insurance, and freight (CIF). The ad-valorem tax structure has CIF as the basis for determining the tax payable. While the tax rate (175 per cent of CIF) was high compared to the rest of the sub-region, the tax structure is such that it has an exceptionally low tax proportion of the retail price.”
Dr Olivia Boateng
Ad-valorem and specific Tax
Dr Boateng disclosed that implementation of a mixed strategy of Ad-valorem and specific tax was proposed by stakeholders to control the affordability and accessibility while increasing government revenues. She stated that the policy proposal is in line with the recommendations of Article six of the WHO Framework Convention on Tobacco Control (FCTC).
The Head of Tobacco and Substances Abuse added that under the new proposed hybrid system, the current import excise tax of 175 per cent Ad-valorem would be maintained, together with the introduction of a specific tax component of per pack of 20 cigarettes with the option of adjustments to cater for inflation.
Mr Rodgers Kidiya, a Policy, Research and Advocacy Officer of TJNA, made a presentation on significance of tobacco taxation and illicit trade from best practices and lessons for Ghana and countering industry interferences. He indicated that higher tobacco taxes would significantly reduce consumption and increase government revenue, adding that the counterarguments about the negative economic impact by the tobacco industry are false and overstated. “Taxes generally are considered to be one of the ‘best buys’ in non-communicable disease prevention”.
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