VALD Advocates Tax Reforms, Effective Tobacco Control

Vision for Alternative Development (VALD), a civil society organisation (CSO) operating in Ghana, has called for reform in the country’s tax structure to strengthen tobacco taxation for effective control of the product and align it with international best practices, such as the World Health Organisation Framework Convention on Tobacco Control (WHO FCTC) guidelines.

Executive Director of programmes-VALD, Mr. Labram Musah, made this call at the National Forum on Tobacco Taxation in Ghana maiden edition, held in Accra on June 27, 2024, and said that by increasing tobacco taxes, government can earn more in tax revenues to finance its sustainable development goals and reduce the need for international assistance while helping to accelerate the country’s development.

“Both developed and developing nations are striving toward achieving the UN Sustainable Development Goals by 2030; however, this development cannot happen without sustainable funding.

For funding to be sustainable, countries are highly advised to look within for domestic revenue to fund their programmes and projects. Unfortunately, among the most untapped sources of funding are excise taxes primarily on tobacco, alcohol and sugar products.

“This can happen directly, by collecting higher taxes from tobacco companies. Indirectly, when tax increases make tobacco less affordable people quit or cut back – resulting in a healthier, more productive workforce that stimulates more economic activity and significantly increases tax revenues more broadly,” he added.

According to him, the ad valorem tax system being practiced in the country is weak and does not meet the requirements of WHO FCTC article 6 implementation guidelines – as the total tax share as a proportion of retail price is below the WHO-recommended 75 percent total tax burden threshold.

He further noted that research shows if tobacco taxes were raised by 10 percent, there would be an estimated 4 percent reduction of its consumption in high-income countries and a 5 percent reduction in low- and middle-income countries.

While highlighting a need to recognise the profound implications of tobacco use on the nation’s well-being, he said its consumption not only jeopardises the health of users and non-users but also imposes a significant economic burden, with estimated costs of GH¢97million in healthcare and productivity losses annually.

The Forum, organised by VALD in collaboration with Ghana Revenue Authority, Tax Justice Network Africa, Ministry of Health, Ministry of Finance, Food and Drugs Authority, Ghana NCD Alliance as well as the Media Alliance in Tobacco or Health is on the theme ‘Strengthening the Evidence for Effective Tobacco Taxation for Health and Development in Ghana’ – underscoring the critical intersection of public health policy and evidence-based research.

It was meant to evaluate the country’s existing taxation structures, present achievements and challenges of national tobacco control and enhance stakeholders’ capacity to protect tobacco policies from industry interference.

It additionally served as a crucial platform to discuss and propose actionable recommendations to align the country’s tobacco taxation policies with global standards, while addressing the social, health, environmental and economic impacts of tobacco use through effective taxation.

The event also witnessed three pivotal reports’ official launch – including the Baseline Assessment of Tobacco Taxation in Ghana 2024; Ghana Tobacco Industry Interference Index 2023; and Novel and Emerging Tobacco and Nicotine Products in Ghana 2024.

The newly-launched Baseline Assessment of Tobacco Taxation report’s objective is to generate essential evidence for evaluating the impact of tobacco tax reforms on tobacco control.

It revealed that cigarettes constitute over 90% of all tobacco products consumed in the country with an average of 2.4 billion of the products consumed yearly between 2007 and 2015, and about 1.6 billion cigarettes during 2020-2022. It added that the country’s tobacco tax burden is very low and there is a need to ensure it meets the WHO recommended level.

It further advocated for amendment of the Tobacco Control (TC) law to disallow the sale of cigarettes in kiddie or small packs as the tactics keeps the product’s price low thereby allowing more children and young people to have access to it.

The report, while taking a swipe at the tobacco industry for being responsible for the country’s health problems, admonished governments to keep it out of policymaking to prevent it from influencing tax legislation in its favour.

It added it is imperative for advocacy groups to provide baseline data that enables them to monitor progress of the tax system.

Meanwhile, in a speech read on his behalf at event, Vice Chair of the Ghana Non-Communicable Diseases Alliance, Mr. Ad Adams Ebenezer, assured of the alliance’s commitment toward working closely with VALD Ghana to address tobacco-related issues in the country. “No successes can be chalked up if we lose focus on tobacco and its allied accomplices.”

Tobacco is the major cause of morbidity and mortality globally – causing 8 million deaths annually. In Ghana its related deaths exceed 5,000 annually.