A tax expert has cautioned the Finance Minister against proposals by Civil Society Organizations (CSOs) and other activists to increase tax of tobacco, alcohol and other Sugar-Sweetened Beverages (SSB).
William Owusu Demitia in an interview with Joy News’ Matilda Womegah noted that although the idea is to serve a good cause, the government must first undertake research analysis before implementing the taxes.
“If there is a tax increment if 50% on a product, how many people can afford that particular product after imposing the tax of 50%. After you get the number of people who can afford it, what is expected revenue you can generate from that,” he explained.
He added, “so one critical factor in determining the impact or the incidence of a tax on a product is what we call the alacrity of the product.”
Stakeholders fighting against the increase of Non-Communicable Diseases (NCDs) in October 2019, petitioned government to consider increasing the taxes of tobacco, cigarette, alcohol and other sugar-sweetened products in the 2020 budget reading.
They were of the view that the tax increment will raise the cost of the products making them unattractive for purchase and consumption.
The tax expert further indicated that government cannot just impose taxes on product adding that “the tax must make economic sense.”
Speaking to some individuals on the matter, some were of the view that it will be a good initiative to reduce the rate of alcohol and cigarette consumption, particularly among the youth.
“People take in alcohol a lot, so if government should increase tax on the product the government will make a lot of money” an interviewee stated.
Another person said “smoking or taking in alcohol is not just something we see, but it is more of an addiction or an attitude. So increasing taxes is not going to change them because people will still purchase it.”
The Finance Minister, Ken Ofori-Atta is to present the 2020 budget and financial policy of the government to Parliament on Wednesday, November 13, 2019.
The Finance Minister has disclosed that the 2020 budget statement will focus on sustaining gains made over the past three years.
This budget will be the fourth under the current administration.