Industry Interference in the Passage of Excise Tax On Tobacco Products in Ghana was Real

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Published on November 15, 2023 by

…As Smokers claim recent Tax Increment on Tobacco Products have not reflected in prices on the market

Some regular cigarette smokers in Ghana have downplayed the effect of the 20% tax increment on Tobacco products. They say it has not reflected on the price of the commodity on the market, and that the price of cigarette has remained the same.

In an exclusive report by Ghananewsonline.com.gh the smokers who admitted that they are heavily addicted to cigarette smoking told members of our investigative desk, that a pack of cigarette still cost Ghc35 and a single stick goes for Ghp1.50. They said however, that, should the price go up further than this they would be forced to find ways to quit smoking because affordability would be an issue.

Parliament of Ghana passed the Excise Duty Amendment Bill 2022 in April this year into law with the expectation that the government would make about GH¢400 million with the imposition of a 20% tax on tobacco and tobacco related products, among others.

The process leading to the passage of the tax law by parliament faced various setbacks which some people have attributed to strong interference from the tobacco industry.

An Economist and Executive Director of Centre for Greater Impact Africa – Rev. Dr. Worlanyo Mensah, in an exclusive interview with our investigators said, industry has the right to oppose these taxes because it causes astronomical increase in production cost of these products leading to redundancy at many of the companies.

“Increment in prices makes cost of production expensive and can lead to redundancy, so industry has the right to fight back, and they did fight back with various technicalities,” he noted.

It is believed that Dr Worlanyo’s Center was one of the organizations that fronted for the Tobacco Industry in its move to delay the passage of the bill.

We can reference a letter of invitation from the Centre for Greater Impact Africa to some selected journalists in the country inviting them to be part of “an Army of Journalist against the Excise Duty Tax”.

Some Members of Parliament even in though refused to be put on record, admitted to the team in private conversations that various organizations and individuals tried various interventions to hinder the passage of the tax measure. According to the Member of Parliament (MP) for the Agotime-Ziope Constituency, Charles Agbeve, who is also a leading member of the Health Committee of Parliament, “these institutions did not use money, however, they were strong in their moves to talking individual MPs into seeing the law as a retrogression and unnecessary at the time.”

Other MPs also admitted that various organizations and individuals tried various interventions to hinder the passage of the tax measure.

The good news is that despite all the stubborn attempts, the law got passed nevertheless.

A concern that has come up, however, is about how impactful the 20% increment in tobacco related products has been on the lives of heavy smokers in the country?

GhanaNewsOnline.com.gh’s investigation team visited the “REDCO Ghetto” around Madina in Accra where we met ‘J’ and his friends who said indeed they have heard of the new tax law but the increment, has not affected them because the prices of cigarette on the market remains the same.

They admitted that, should the prices move to 2ghc per stick and 40 per pack, they would be left with no option than to quit smoking because affordability would surely be an issue. They said they are much aware of the negative impact of cigarette on their bodies but the addiction would not let them quit easily. They are even ready to move into smoking other substances should that become the only affordable measure to them.

“We haven’t seen any increment here, the pack of Kingsize is still 35Ghc and a single stick is 1.50Ghc, I buy it every day and no one has increased the price here,” he said.

We spoke with some Ghanaians on the street who insisted that increasing prices on tobacco products is a laudable step to rake in revenue for government. “It would also deter smokers from continuing with the habit,” they noted.

Our investigations reveal that the Excise Duty Tax faced and continues to face many hurdles from industry. For this reason we are recommending the strengthening of a dedicated media groups like the Media Alliance in Tobacco Control and Health (MATCOH) to help promote the works of advocates against tobacco in Ghana.

Source: ghananewsonline.com.gh

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