Excise on Sweetened Drinks Set to Take Effect Next Year in Draft State Budget

JAKARTA. The government plans to impose excise on sweetened drinks in packaging (MBDK) starting in 2025. This is stated in the 2025 Draft State Budget (RAPBN).

Interestingly, despite targeting the imposition of excise tax on MBDK next year, the government no longer includes a plan to impose excise tax on plastic packaging, which was previously submitted in the 2024 State Budget.

Previously, the government had submitted the 2025 Draft State Budget document to the House of Representatives (DPR) to be discussed and stipulated as the 2025 State Budget.

The Objectives of MBDK Excise Tax 

In the 2025 Draft State Budget document, the government outlined several reasons for making this policy. In general, this measure is expected to reduce public consumption of sugar.

1. Control Sugar Consumption

The imposition of excise tax on MBDK will be carried out on a limited basis, as part of the excise tax extensification policy. The purpose of this policy is to control excessive consumption of sugar or sweeteners.

2. Industry Reduces Sugar Content

In addition, the government also hopes that with the imposition of excise, the MBDK Industry can reformulate its products to be Low Sugar. 

‘So that ultimately it is expected to reduce negative externalities for public health for public health,’ the government explained as quoted from the 2025 Financial Note and Draft State Budget document.

3. Increase People's Productivity

The government also stated that with the reduction in sugar consumption by the public, the prevalence of non-communicable diseases among the community will decrease, so that community productivity can be maintained.

Risks the Government Must Anticipate

However, implementing this policy comes with certain risks. The government must consider several key factors, including the following:

1. Potential to Increase Inflation

The government, in the RAPBN, revealed that the implementation of this policy must be accompanied by inflation mitigation measures. For information, the government targets the inflation rate in 2025 to be 2.5%. Meanwhile, in 2024 the inflation target is estimated to reach 2.7%.

2. Eroding State Revenues

The imposition of excise tax on MBDK is also considered a risk to state revenue in 2025. Therefore, the government revealed that anticipatory steps need to be prepared to mitigate the impact on the economy and tax revenue.

As an illustration, the excise revenue target in 2025 is set at IDR 244.2 trillion, or an increase of 5.9% from the 2024 excise revenue outlook. Meanwhile, the tax revenue target in 2025 is set at IDR 2,490 trillion. (ASP)