Prices of beer made from cider are expected to go up in the coming days following the imposition 17.5% tax on the product.
The decision, according to government officials, is to enable the local beer industry compete effectively with other alcoholic beverage brands.
The imposition of the tax comes following the passage of the Excise Duty (Amendment) (No. 2) Bill, 2015 into law by the Parliament of Ghana on December 23, 2015.
The Bill which was presented to Parliament on behalf of the Finance Minister by one of his deputies, Ato Forson, on November 27, 2015, sought to amend the Excise Duty Act, 2014 (Act 878) to reduce the sliding scale excise duty in respect of malt and beer from four bands to three bands and to impose excise duty on cider beer.
With the passage of the Bill into an Act, companies that use less than 50% of local raw materials to brew beer stout will attract an excise duty of 47.5% of the ex-factory price.
The use of 50% to 70% local raw materials will attract 32.5% of the ex-factory price while those that use 70% and more of local raw materials will attract 10% of the ex-factory price.
Chairman of the Finance Committee, James Klutse Avedzi, presenting his committee’s report for consideration and subsequent adoption by the House stressed that though the 17.5% excise duty tax on Cider beer may seem relatively low, the imposition has the potential of creating a major change in the cider beer industry.
Deputy Minister for Finance, Cassiel Ato Baah Forson explaining the rationale behind the imposition of the tax told Parliament that the 17.5% excise duty tax on cider beer was fair considering the prevailing rate of 47.5% in the brewery industry.
He further told the House that in 2012, the government introduced zero tax rate on cider to provide incentive for brewery companies to manufacture cider beer locally.
“Government is now convinced that the implementation of this policy over the past four years has provided sufficient policy to support the cider beer industry and that the industry could now compete effectively, hence, the imposition of the 17.5% excise duty tax,” he added.
