Cisdi Regrets That Sweetened Drinks Are Not Included In The HPP Law: For The Sake Of Public Health, They Should Be Subjected To Excise

JAKARTA – The Center for Indonesia's Development Initiatives (CISDI) regrets the government's decision not to include packaged sugary drinks in the Law on Harmonization of Tax Regulations (UU HPP). However, Project Lead Food Policy Cisdi Ayu Ariyanti said that there is still an opportunity for the sector to be subject to tax levies in the future.

“Unfortunately, the excise duty on packaged sugary drinks is not explicitly included in the HPP Law. But we are optimistic that there is still a chance to add it to the list of excisable goods (BKC) next year," she said in a written statement as quoted on Sunday, October 9.

According to Ayu, the signal was captured from a statement by the Minister of Law and Human Rights (HAM) Yasonna H. Laoly who said that the government opened the opportunity to add BKC in the preparation of the Draft State Revenue and Expenditure Budget (RAPBN).

"We urge to immediately follow up the HPP Law by applying for an excise tax on packaged sugary drinks to improve the health of the Indonesian people," she said.

Yasonna said that his party was worried that the addition and application of excise in the sector would be stretched like a plastic excise.

"In fact, it is very important for Indonesia to immediately control the consumption of sugary drinks which are closely related to the prevalence of diabetes and obesity," he said.

Similarly, a researcher from Gadjah Mada University, Shita Dewi, said that if the public's health condition is sufficient, it has the potential to increase the burden of medical expenses borne by the government through the National Health Insurance (JKN).

"Revenue from earmarked excise for the health sector also has the potential to become a new source of health financing," she said.

Furthermore, Shita explained that excise duty is one of the policy instruments that can encourage behavior change, both consumer and producer behavior.

"Excise is one of the policy options that proves the role of multi-sectors to support the government's efforts to control non-communicable diseases," she said.

For the record, Indonesia is a country with the third-highest consumption of packaged sugary drinks in Southeast Asia with consumption of 20.23 liters per person in one year.

In addition, based on Basic Health Research, the trend of obesity in Indonesia increased from 10.3 percent in 2007 to 21.8 percent in 2018. It was also revealed that people with diabetes experienced an increasing trend from 5.7% percent in 2007, soaring to 10.9 percent in 2018.