Indonesia, the Environment & Health: Sugar Tax, Plastic Tax & Carbon Tax?

#Indonesia #sugartax #plastictax #carbontax? "Indonesia plans to impose excise duty on plastic bags, sugary drinks and vehicle emissions with the new levies expected to net the government about $1.7 billion in additional revenue annually." There are likely fewer to challenge sugar and plastic duty/taxes, but a move on vehicle emissions could become challenging for diesel usage, which has become a rising policy for the #palmoil sector.

Indonesian Finance Minister Sri Mulyani Indrawati. Photo credit: Antara/Sigid Kurniawan.

#KhorReports contacts in Jakarta finance see a high possibility of implementation, with a senior economic advisor also explaining that “it could happen, considering the big short fall in [fiscal] revenue.” But naysayers see it as “desperate, with a 0% chance of implementation. It’s a last gasp for Sri Mulyani, who has to go.”

Khor Reports coverage of the sugar in popular local drinks, sweetened beverages, bubble tea and juices is here: Boba Boom: The Rise of Boba and the Sugar Strikes Back. The issue of waste plastic (especially on Malaysia) is covered here: Out of Sight, Out of Mind: Waste Plastic Imports to Malaysia.

Sugar, Sugar: A Quick Revisit

Some good news on the healthy living front: a recent study from Oxford University has found that between 2015 and 2018, the total amount of sugar sold from soft drinks per capita per day in the United Kingdom has declined by 30%, with the average sugar content of soft drinks dropping from 4.4g of sugar per 100 ml in 2015 to 2.9g/100ml in 2018. Following the introduction of the Soft Drinks Industry Levy (SDIL) in April 2018, which affects soft drinks with a sugar content of 5g or more per 100ml, sales volume of soft drinks subjected by the tax has halved while that of low- and zero-sugar drinks collectively jumped by 40%.

While the research cautioned against using its results as an assessment of the SDIL, it did give it credit for helping accelerate the shift in soft drink sugar content, especially since it observed no changes to the sugar content of soft drinks excluded from SDIL; anything beyond that is attributed to changes in consumer preference and purchasing behaviour.

Observers note the SDIL or “sugar tax” impact was 73% of total sugar reduction was due to reformulation and new lower-sugar drinks and 27% was due to changes in consumer behaviour!

Reading this article (find it here) takes us back to our piece on bubble tea, where we found that drinking a 500ml drink of bubble tea at 100% sugar level was pretty much the same as drinking three cans of Coca Cola. With the average Malaysian apparently consuming a whopping 3kg of sugar from sugary drinks annually, fingers crossed that the introduction of our own sugar tax in July 2019 will bring Malaysia a sweet victory too (pun intended).