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Govt includes sugary drink tax in 2023 budget
The government finally seems set to impose an excise tax on sugary drinks tax next year, with the caveat that its implementation would depend on economic recovery.
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Stock illustration of sugary drinks (Shutterstock/monticello)
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fter years of sluggish progress, the government has inched closer to realizing 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 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 percent of the excise tax revenue currently comes from tobacco products, which totaled 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.
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