My Take on Ghana’s Excise Duty Amendment Bill, 2022: [Part III]

The Ghanaian Parliament on December 20, 2022 debated, voted, and approved a Bill to tax Sugar-Sweetened Beverages (SSBs) and other products – as per the Ghana Excise Duty Amendment Bill, 2022. In this series, I present my take on this policy intervention.  In Part II, I restated some of the concerns and requests that a Ghanaian food activism coalition –  The “Advocating for Ghana’s Health (A4H) Coalition” recently submitted to the Government of Ghana.  In this section of the article, I make good my promise to present the evidence in support of food-related fiscal policies. Globally, several countries are implementing fiscal policies as well as other food environments policies in response to evidence-informed calls from the research community, as well as global public health institutions such as the WHO. I outline here select examples of these policies – from across the globe. For more information on lessons on implementation of SSB tax, front-of-pack food labeling, and restrictions of food and non-alcoholic beverage marketing to children globally, please visit World Cancer Research Fund’s database.

Briefly, food composition policies are motivated by evidence linking unhealthy food supply systems to the rise in malnutrition. These policies aim to minimize energy-density and nutrients of concern (e.g. salt, fat, saturated fat, trans-fats, added sugar) in processed foods. In 2014, the Argentine Government successfully passed a law on mandatory maximum levels of sodium for various food products. Several countries currently ban the use of trans-fats in foods. In 2013 (South Africa) and in 2019 (Morocco) adopted mandatory targets for salt reduction in several food categories including bread, breakfast cereals, margarines, savory snacks, processed meats, dry soup and gravy powders and stock cubes. The 2020 WHO Global NCD Progress Monitor report limited government efforts in implementing these policies. According to this report, in Africa only Tunisia, and Morocco reported fully implementing salt/sodium policies (Tunisia) and saturated fatty acids/trans-fats policies (Morocco and Tunisia).

Noted, earlier, food-related fiscal policies (including levies on unhealthy foods and subsidies on healthy foods) promote and assure health outcomes by helping to make healthy eating choices easier and cheaper.  Beginning in 1981 in Norway, several other countries have since used fiscal policies, as a major approach to curbing consumption of SSBs. Currently nearly 50 countries and smaller jurisdictions have enacted and implemented SSB tax. Such taxes have been shown to be impactful when well designed and implemented. In 2014, Mexico introduced a tax of 10% or 1-peso-per-litre tax on beverages containing added sugar. An analysis of Mexican sugary beverage sales showed about 6% reduction in purchased volume relative to pre-tax trends over the first year of the tax, and a 9.7% decrease in 2015. The largest decrease in purchases was amongst the most socioeconomically disadvantaged. Implemented since October 2014, the Chilean SSB tax (18% ad valorem tax on sugary drinks containing >6.25 g sugar/100 mL) was able to reduce the monthly purchased volume of the higher taxed, sugary soft drinks by 21.6%. Of note, the Chilean SSB tax includes all non-alcoholic drinks with added sweeteners (exempts 100% fruit juice and dairy-based beverages); 10% ad valorem tax on drinks with <6.25 g sugar/100 mL.

SSB tax policies implemented in other countries such as the UK and several subnational jurisdictions in the USA have also resulted in statistically significant reductions in SSB purchases. In 2011 Hungary imposed a Public Health Product Tax on food products containing unhealthy levels of sugar, salt and other ingredients, and raised about $68,000) of revenue. In the fourth year, revenue increased to about $100,000 per year. In 2015, it was estimated that the tax  had generated the equivalent of $219 million since it went into effect. In Thailand, the United Kingdom, Portugal, Malaysia, and South Africa, the announcement of the imposition of an SSB tax urged manufacturers to reformulate –  to reduce the sugar content of their products. Presenting evaluation insights of taxes on SSBs in Mexico, Chile, South Africa, the UK, US, and many other countries, Barry Popkin recently noted that “these taxes impact intake roughly equal to the size of the taxes. Taxes on sugar content and tiered taxes (as in the UK, and South Africa) appear to have a larger effect on both reformulation, and sugar purchases. Volumetric taxes have bigger impact on revenue”.

However, implementation of this policy in Africa is currently sparse. In November 2017, South Africa’s National Assembly passed the Health Promotion Levy – 11% tax applied after the first 4 grams of every 100mL of liquid, and each gram thereafter is taxed at ZAR 2.2 cents per gram.  Products covered by the tax when it came into effect in April 2018 included non-alcoholic beer, and to non-alcoholic drinks with added sugar or flavoring in the form of syrups, other concentrates, cocoa powder or malt extract.  

In all settings, but more especially in low, and middle income countries, questions of regressivity, price elasticity, and equity have been asked. Answers have been provided. In South Africa for example, academic studies conducted by South African researches show the following:

  • Nationally, prices of taxable carbonated beverages rose whereas non-taxable beverage prices did not change meaningfully.
  • The research showed that urban household purchases of taxable beverages post implementation fell by 29% with sugar from these purchases falling by 51%. Importantly, lower socioeconomic urban households reduced their volume and grams of sugar from SSBs by 32% and 57%, respectively.
  • Daily beverage intake by young (18–39 years) adults showed a 37% reduction in volume and 31% in sugar according to another research.  
  • The combined price increase and purchases/sales of SSBs together generated revenues of 5.8 billion ZAR over the first two fiscal years of the tax being in place (approximately 0.2% of total government revenue over the same period)  The revenue has gone towards the country’s general fund and was not earmarked.

Other African countries including Mauritius, Seychelles, Morocco, Botswana, and Nigeria have enacted and are implementing SSB tax policies. Implemented April 1, 2019, in Seychelles: $0.22 per L import tariff on all beverages containing >5 g sugar/100 mL (exempt: fresh, locally produced drinks without additives and plain milks). Implemented since January 2013, and updated in October 2016, Mauritius imposed $0.00075 per g sugar on sodas, syrups, and fruity drinks with added sugar.

In Part IV, I share how our food activism work used evidence-informed advocacy and scholar activism to increase the demand for healthy food policy in Ghana. I give hints of how power asymmetries between “public” and “private” interests confound promulgation and implementation of these policies

The writer, “Amos Laar, PhD” is a Professor of Public Health Nutrition at the School of Public Health, University of Ghana, Legon and Principal Investigator (PI) of the A4H Project, the HD4HL Project and the ‘MEALS4NCDs Project’  and Co-PI of the Dietary Transitions in Ghanaian Cities.  He is a Fellow of the Ghana Academy of Arts and Sciences.

Image from “The global soda tax experiment” Credit: Michael Morganstern

Posted in All, My Take, SSB Tax.