Indonesia includes sugary drink tax in 2023 budget


sugar

JAKARTA (The Jakarta Post/Asia News Network): After years of sluggish progress, the government has inched closer to realising its plan to impose an excise tax on all packaged sweetened beverages, when the Finance Ministry and the House of Representatives Budget Committee (Banggar) agreed to include sugary drinks as goods subject to excise tax in next year’s budget.

During a hearing on Tuesday (Sept 27) last week, lawmakers and the government decided to include taxes sweetened beverages and plastic products in the 2023 state budget (APBN), though Finance Minister Sri Mulyani said implementing the excise would largely depend on the pace of recovery next year.

"Sweetened beverages and plastic products bring a lot of negative impacts to public health and the environment. But we are still calculating how much the excises imposed on the two products will impact the economy as a whole. We will try to find a balance," Sri told journalists last week.

The Finance Ministry had been entertaining since 2009 the idea of taxing sugary drinks to diversify revenue sources but progress had been slow, mainly due to resistance from businesses.

According to the ministry, 96 per cent of the excise tax revenue currently comes from tobacco products, which totalled Rp 188.8 trillion (US$12.3 billion) last year.

It estimates that the sweetened beverage excise would rake in roughly Rp 6.25 trillion in annual revenue.

In 2020, the Finance Ministry again proposed imposing a sugary drink tax with a more detailed scheme, but the plan had yet to bear fruit.

The agreement between the ministry and the House Budget Committee opens a new chapter in government efforts to combat the country’s growing diabetes epidemic.

According to a 2021 report from the International Diabetes Federation (IDF), around 19.5 million adults have diabetes in Indonesia, placing it among the top five countries in the world with the highest number of diabetes patients.

The report estimates diabetes prevalence of 10.8 per cent among Indonesians aged 20 to 79, meaning that one in 10 adults in the country suffer from the chronic disease.

The number of diabetes patients in Indonesia in 2021 increased nearly two-fold from around 10.7 million in 2019 and three-fold from 7.3 million 2011.

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