31/12/2022, 11:40 Indonesia includes sugary drink tax in 2023 budget - Asia News NetworkAsia News Network

Indonesia includes sugary drink tax in 2023 bu

The Finance Ministry has been entertaining the idea of taxing sugary drinks since 2009
businesses.

Stock illustration of sugary drinks(Shutterstock/monticello)

 October 6, 2022

JAKARTA – After years of sluggish progress, the government has inched closer to realizing its plan
sweetened beverages, when the Finance Ministry and the House of Representatives Budget Comm
as goods subject to excise tax in next year’s budget.

During a hearing on Tuesday last week, lawmakers and the government decided to include taxes
2023 state budget (APBN), though Finance Minister Sri Mulyani said implementing the excise wou
year. Privacy - Terms

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31/12/2022, 11:40 Indonesia includes sugary drink tax in 2023 budget - Asia News NetworkAsia News Network

“Sweetened beverages and plastic products bring a lot of negative impacts to public health and th
much the excises imposed on the two products will impact the economy as a whole. We will try to

The Finance Ministry had been entertaining since 2009 the idea of taxing sugary drinks to diversif
mainly due to resistance from businesses.

According to the ministry, 96 percent of the excise tax revenue currently comes from tobacco pro
billion) last year. It estimates that the sweetened beverage excise would rake in roughly Rp 6.25 tr

In 2020, the Finance Ministry again proposed imposing a sugary drink tax with a more detailed sc

‘Diabetes epidemic’

The agreement between the ministry and the House Budget Committee opens a new chapter in g
growing diabetes epidemic.

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

The report estimates diabetes prevalence of 10.8 percent among Indonesians aged 20 to 79, mea
from the chronic disease.

The number of diabetes patients in Indonesia in 2021 increased nearly twofold from around 10.7
2011.

Experts have attributed the growing diabetes prevalence in the country to an increasing shift tow
IDF’s data seem to support this theory, as 98 percent of the 19.5 million diabetes patients in the c
diabetes, which is mainly linked to obesity and inactivity and develops over time.

The country has been seeing a massive increase in the annual consumption of sugary drinks over
million liters in 1996 to 780 million L in 2014. In 2020, Indonesia was the third-highest consumer o

State burden

The country’s growing diabetes prevalence has heavily burdened the Healthcare and Social Secur
expenditures for diabetes treatment have grown 8 percent each year.

In 2019, BPJS Kesehatan spent Rp 108 trillion on diabetes treatments, a 29 percent increase comp

Deputy Health Minister Dante Saksono Harbuwono stated earlier that aside from increasing diab
costs was due to the fact that 74 percent of Indonesian adults with diabetes were undiagnosed an

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31/12/2022, 11:40 Indonesia includes sugary drink tax in 2023 budget - Asia News NetworkAsia News Network

Early diagnosis and effective management of diabetes are crucial to reduce patients’ risk of devel
disease, stroke, kidney failure and blindness. It can also cause diabetic neuropathy and periphera
leg amputation.

The Health Ministry has been ramping up its efforts to curb the incidence of diabetes and reduce
screening in remote regions and intensifying disease management and monitoring for patients.

However, noncommunicable disease control and prevention director Eva Susanti said on Thursda
curb the country’s growing diabetes problem, and that a fiscal policy was needed to control the co
disease.

“We need to optimize our efforts by pushing manufacturers to reformulate their products so they
by imposing an excise on sweetened beverages. We want to ensure that we have the appropriate
she added.

NGOs and the public have long called on the government to tax packaged sweetened beverages a

The Center for Indonesia’s Strategic Development Initiatives (CISDI), an independent think tank ba
Indonesia Food Policy Coalition to create an online petition demanding the immediate imposition
have signed the petition so far.

CISDI policy director Olivia Herlinda said neighboring countries, such as Thailand, Malaysia, Philip
sugary drink tax.

“In those countries, public consumption of sugar-sweetened beverages dropped dramatically afte
believe it is a very effective fiscal policy that can go a long way toward improving people’s health a

So far, 49 countries across the globe have an excise tax on packaged sweetened beverages.

Mexico’s 10 percent tax on sugary drinks, for example, has been proven to reduce the consumpti

Meanwhile, the United Kingdom’s sugary drink tax has led to widespread reformulation among m
products.

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