Sugar tax starts today

Excise tax of 40 sen per litre is levied on sweetened beverages with more than 5g of sugar per 100ml


THE sugar tax finally begins today.

It was initially expected to begin on April 1 but postponed to today to allow manufacturers and the Customs Department time to prepare.

An excise tax of 40 sen per litre is levied on sweetened beverages with more than 5g of sugar or sugar-based sweetener per 100ml. This includes carbonated, flavoured and other non-alcoholic beverages.

Juice or vegetable-based drinks with over 12g of sugar per 100ml will also be taxed.

Finance Minister Lim Guan Eng announced the plan to introduce the tax during the tabling of the 2019 budget in November last year.

This follows a study conducted by the Ministry of Health (MoH) which found that nearly one in two Malaysians are overweight or obese.

The government has pushed the idea to impose a sugar tax as part of its efforts to promote a healthy lifestyle as Malaysia is reported to be the fattest country in South-East Asia with obesity and diabetes levels on the rise.

According to the World Health Organisation, 13.3% of Malaysians are obese and 38.5% overweight, in addition to the highest proportion of diabetics (14.9%).

In a report entitled “Tackling Obesity in Asean” released by the Economist Intelligence Unit in 2017, it was found that among the factors contributing to Malaysians’ growing waistlines and health problems were rising incomes, shifting lifestyles and the lack of awareness about sugary drinks.

The MoH and other related bodies have welcomed the introduction of the tax as a move towards addressing national health issues and concerns.

With more than half of the population deemed as unhealthy, the cost of healthcare is enormous for the country, with estimates ranging between US$1 billion (RM4.15 billion) and US$2.1 billion based on a 2017 study by the Asia Roundtable on Food Innovation for Improved Nutrition.

This is a massive amount, considering the RM29 billion allocation for health under the 2019 budget.

Detractors and critics of the tax, however, opined that it would not be enough to make an impact, with reactions ranging from approval and concern to effectiveness and scepticism.

Similar tax is being imposed in other countries including the US (in certain cities), the UK, France, Mexico, Norway, Portugal, the United Arab Emirates, Saudi Arabia and South Africa.

Closer to home, Thailand, Brunei (both in 2017) and the Philippines (in 2018) are among the countries that have imposed the tax.

In April this year, Health Minister Datuk Seri Dr Dzulkefly Ahmad said the sugar tax is limited to manufacturers for the time being, and that there are no plans to extend it to eateries.

“We are now at the stage of educating consumers to drink less coloured, sugary drinks. That is the only way, at the moment, that we can discourage consumers from drinking these drinks,” he said.

Meanwhile, in March, Prime Minister Tun Dr Mahathir Mohamad said there will be no new taxes except for the sugar tax.

He also said beginning next year, the government will use the revenue collected from this tax to provide free and healthy breakfast for all primary school children.