Introduction
The Excise Duty (Amendment) Act, 2023 amends the Excise Duty Act, 2014 (Act 878). This amendment was assented to on 3rd April 2023. The object of the Act is to increase the excise duty in respect of cigarettes and tobacco products, wine, malt drinks, and spirits and to impose excise duty on sweetened beverages, including fruit juices, and on electronic cigarette liquids, electronic cigarettes, and electronic smoking devices.
Background
The main objective of passing the Excise Duty (Amendment) Act is to foster a contribution to healthy living in the country. The government speaking through Mr. Labram Musah, the National Coordinator for Ghana Non-communicable Disease Alliance (GhNCDA) stated that a study conducted by the GhNCDA per the Global Obesity Observatory 2023 had shown that Obesity was gaining ground in developing countries specifically with 4.5 children out of 11 Ghanaian children being obese. Similarly, 7 out of 10 Ghanaian adults are medically obese.
As such, the state, based on this analysis concluded that the influx of cheap but unhealthy foods and lifestyles has penetrated the system such as the high consumption of junk foods. Thus, the passing of the bill is to ensure that the prices of such goods rise which in turn causes the demand and reliance for it to reduce.
The Excise Act
The Act imposes an Excise duty on the following goods which substituted the First Schedule of Act 878. It imposes the following tariff percentages on the various goods:
Tariff Number 1 (a): twenty percent (20%) of the ex-factory price duty on the following commodity description;
(a) Waters, including waters of all descriptions whether containing added sugar or sweetener. This includes mineral water, aerated water, non-alcoholic beer, energy drinks, any other non-alcoholic drinks, and Fruit juices.
(b) There is a seventeen and a half percent (17.5%) of the ex-factory price duty on any distilled, bottled water.
Tariff Number 2 includes Malt drinks with a percentage use of local raw material imposes:
(a) a twenty percent (20%) of the ex-factory price duty on any drink with less than Fifty percent (50%) local raw materials in its making.
(b) a twelve and half percent (12.5%) of the ex-factory price duty is imposed on drinks with 50% – 70% of local raw materials.
(c) a ten percent (10%) of the ex-factory price duty is imposed on drinks with more than 70% local raw materials in their preparation.
Tariff Number 3 includes Beer, stout other than an indigenous beer per the percentage use of local raw materials. It imposes the ex-factory price in the following percentages:
(a) a forty-seven and a half percent (47.5%) of the ex-factory price duty on any such drink with less than 50% local raw materials in its produce.
(b) A thirty-two and a half percent (32.5%) of the ex-factory price duty is imposed on drinks with 50% – 70% of local raw materials.
(c) a ten percent (10%) of the ex-factory price duty is imposed on drinks with more than 70% local raw materials in their preparation.
Tariff Number 4: Cider Beer, a Twenty percent (20%) of the ex-factory price duty is imposed for all such goods.
Tariff Number 5: Wines including sparkling wine imposed with Forty-five percent (45%) of the ex-factory price duty.
Tariff Number 6: Spirits including “Akpetshie” is imposed with the ex-factory price the following percentages:
(a) Fifty percent (50%) duty on distilled or rectified spirits and Blended or compounded spirits
(b) Whereas Akpetshie is imposed with a Twenty percent (20%) duty
Tariff Number 7: Tobacco Products are imposed with the following percentages:
(a) Fifty percent (50%) of the ex-factory price duty and a specific duty of 28 pesewas per stick on Cigarettes and Cigars.
(b) GHS 280 per kilogramme on Negrohead, Snuff, and other tobacco
(c) Fifty percent (50%) of the ex-factory price duty and a specific duty of 50 pesewas per millimetre on electronic cigarette liquids.
(d) Fifty percent (50%) of the ex-factory price duty on electronic cigarettes and electronic smoking devices.
Tariff Number 8: all Plastic and Plastic products listed under Chapters 39 and 63 of the Harmonized System and Custom Tariff Schedules 2012 are imposed with ten percent (10%) of the ex-factory price duty. The duty is computed on the Cost, Insurance, and Freight (CIF) value and is payable at the point of entry.
Tariff Number 9: which entails other products such as textiles and pharmaceuticals is imposed with Zero percent (0%).The duty is payable to the Commissioner General in accordance with section 6 of Act 878.
Conclusion
Why the imposition and increase of taxes? The simple answer is as described above, that is, to regulate the consumption of sweeteners and any medically classified “unhealthy” goods that the state believes negatively impacts the life of a person.
The Author, Miriam Kwateng is a dual qualified legal practitioner who is a barrister and Solicitor of the Supreme Court of Ghana and is a Solicitor of United Kingdom (UK). She is currently a member of Zoe, Akyea & Co located at Labone.
