Excise duty changes could hurt local raw material use - AGI

The Association of Ghana Industries (AGI) has warned that changes to the excise duty regime for breweries could affect the use of locally sourced raw materials and disrupt the value chain supporting local manufacturers.

AGI Chief Executive Officer Seth Twum Akwaboah said the association is concerned about the impact of the current tax structure on Accra Brewery Limited (ABL) and other manufacturers in the sector.

He said ABL has petitioned the AGI over challenges it is facing.

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“It has come to our notice and indeed, they've petitioned us. And we are equally concerned because ABL is one of our key members,” he said.

Akwaboah said the issue goes beyond Accra Brewery because several manufacturers depend on the same system.

“It is not only ABL. I think there are other manufacturers in the game. And we are therefore very concerned. And we are concerned not just because we are dealing with Accra Brewery. We are dealing with the whole industry and the sector,” he said.

Speaking on JoyNews on Thursday, August 13, 2026, he explained that the sliding-scale system for taxing alcoholic beverages was designed to encourage companies to use more local raw materials.

“The whole objective of the sliding-scale model of taxing the breweries was basically to promote the use of local materials,” he said.

Under the system, breweries that use less than 50% local raw materials pay an excise duty rate of 47.5%. Companies that use between 50% and 70% local raw materials pay 32.5%, while those that use more than 70% pay 10%.

“So, the more of the local raw materials you use, the less your tax rate,” Akwaboah said.

He said the system was intended to encourage breweries to increase their reliance on locally produced materials and support businesses within the domestic supply chain.

According to him, breweries in Ghana use locally sourced cassava, sorghum, maize and other agricultural products in their production.

“It will surprise you to know that the beer we drink, we use cassava, they use sorghum, they use maize, all kinds of products sourced locally,” he said.

Akwaboah said increased use of local raw materials creates opportunities for farmers and small businesses that supply the manufacturing sector.

“The more of it you use, the more you are deepening the value chains. The small enterprises, the farmers that are producing these products, they are very important in the chain,” he said.

He acknowledged that the tax rates under the system are already high but said taxation of alcoholic beverages is understandable because such products are considered non-essential.

“Generally speaking, you could see that even the numbers I mentioned are quite high,” he said.

He explained that the government views alcoholic beverages as luxury products and therefore uses taxation to generate revenue from them.

“It is seen that it is not a good of necessity. It is a luxury product. Because you can live without it,” he said.

However, Akwaboah cautioned against changes that could weaken the incentive for manufacturers to use local raw materials.

He said such changes could affect farmers and small businesses that depend on breweries and other manufacturers for demand.

“Anytime you tweak it, then you are creating a bit of imbalance and uncertainty,” he said.

ANAS/MA

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