Indonesia delays sugary drinks tax (Photo:AFP/VNA) Jakarta (VNA) – The Indonesian government has once again delayed the implementation of the long-awaited excise tax on sweetened beverages, raising questions over its commitment to improving post COVID-19 pandemic public health.
In 2022, the Finance Ministry and the House of Representatives Budget Committee (Banggar) agreed to include taxes on sweetened beverages and plastic products in the 2023 state budget, though Finance Minister Sri Mulyani said implementing the excise fees would largely depend on the pace of recovery in 2023.
Nirwala Dwi Heryanto, director for communication at the ministry’s customs and excise directorate general, said it was unlikely that the plan to tax sugary beverages could be implemented this year as the ministry was still in the process of completing the legal requirements to impose the excise.
He acknowledged that officials are currently planning to draft a government regulation as a legal basis to tax sugary drinks while considering the momentum of the country’s economic recovery. The ministry is planning to propose the excise tax to the House Commission IX overseeing health in May. If all goes well it may be in effect next year.
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.
In 2020, the ministry again proposed imposing a sugary drink tax with a more detailed scheme, but the proposal was denied by lawmakers due to the economic slump during the COVID-19 pandemic.
The government’s sluggish progress to implement a tax on sugary beverages has raised questions over its commitment to improving public health, especially amid the Health Ministry’s ongoing effort to reform the healthcare system following the devastating impact of the COVID-19 pandemic.
Health Minister Budi Gunadi Sadikin penned a ministerial regulation in July that instructed regional administrations to follow a national healthcare transformation blueprint that prioritised illness prevention, rather than treatment.
As part of the preventative efforts, the ministry is expanding the national childhood immunisation programme, offering free screenings for 14 common deadly illnesses healthy lifestyles for Indonesians.
But the ministry’s noncommunicable disease control (NCD) and prevention director Eva Susanti has said that these efforts alone were not sufficient to curb the country’s growing NCD problem, and that fiscal policy was needed to control the consumption of unhealthy foods to prevent the disease.
Sasanti highlighted that the ministry needs to optimise efforts by pushing manufacturers to reformulate their products so they have lower levels of sugar, salt and fat, such as by imposing an excise on sweetened beverages./.
