Vision for Accelerated Sustainable Development Ghana (VAST Ghana) has welcomed Parliament’s passage of the Excise Tax Bill 2026. The civil society organization views this legislation as a crucial step towards using fiscal policy for both revenue generation and public health improvement. VAST Ghana, however, asserts that the current law needs further strengthening to achieve its full potential.
The organization specifically calls for a broader hybrid tax regime for alcoholic beverages. This system would combine specific taxes based on quantity with value-based rates. VAST Ghana also advocates for stronger excise duties on tobacco products and a reconsideration of exemptions for locally produced fruit juices. They also seek greater consistency in policy regarding electronic cigarettes.
This intervention by VAST Ghana comes as Ghana faces a growing burden from non-communicable diseases (NCDs). These diseases contribute significantly to higher healthcare costs and strain the health sector's external financing. NCDs are responsible for about 45% of all deaths in Ghana, placing immense pressure on households and the public health system. Conditions like cardiovascular disease, cancer, diabetes, and chronic respiratory illnesses require expensive, long-term treatment, making prevention a critical economic and health issue.
VAST Ghana emphasizes that health taxes are a dual-purpose policy tool. Higher excise duties can immediately generate revenue for the government. Simultaneously, these taxes discourage the consumption of products linked to preventable illnesses. The organization connects its reform proposals to the World Health Organization’s “3 by 35 Initiative.” This initiative aims to increase the real prices of tobacco, alcohol, and sugar-sweetened beverages by at least 50% by 2035.
For Ghana, the benefits of such taxes are clear. If consumption of harmful products decreases, future healthcare expenditure may also decline. If consumption does not fall immediately, the government still mobilizes additional revenue. This revenue can then be directed towards critical health-sector priorities.
One significant aspect welcomed by VAST Ghana is the shift in spirits taxation. The new bill moves away from a purely ad valorem system, where tax depends solely on product price. Instead, it adopts a hybrid structure combining specific and value-based rates. An ad valorem regime can allow consumers to switch to cheaper alcoholic beverages to avoid higher taxes. A specific component, however, taxes based on quantity or alcohol content, making it harder to avoid tax by buying lower-priced brands.
VAST Ghana argues that combining these two systems can enhance both public health and revenue collection from alcohol taxation. They cite international examples from countries like Thailand and the Philippines, which have successfully implemented hybrid excise structures. The organization urges extending this reform beyond spirits to include beer, wine, cider, and ready-to-drink alcoholic beverages. The goal is to establish a consistent hybrid framework across all alcohol categories, reducing substitution between them and broadening the tax base.
Furthermore, VAST Ghana wants policymakers to consider a minimum unit pricing regime for alcohol. This system would set a floor price below which alcoholic beverages cannot be sold legally. Such a measure would make the cheapest, high-alcohol products less affordable. The organization worries that taxation alone might be less effective if producers or retailers absorb part of the tax or continue offering very low-cost alcohol. Minimum pricing could therefore reinforce the behavior-change objective of the excise regime.
VAST Ghana expressed less support for removing the 20% excise tax on locally produced natural fruit juices. While acknowledging the government’s intention to support domestic manufacturers, the organization warns this exemption could undermine the broader health goals of the excise policy. VAST Ghana states that fruit juices, especially those with free or concentrated sugars, can significantly contribute to excessive sugar intake. This increases the risk of NCDs, regardless of local production. The public-health impact of a beverage depends more on its sugar content than its origin.