The Ministry Of Industry Calls MBDK Excise For Drinking Production Prices To Rise Until State Revenue Drops

Illustration of sweetened drinks (Photo: Unsplash)

JAKARTA - The Ministry of Industry (Kemenperin) said, there are several impacts if the implementation of packaged sweetened Drinks (MBDK) excise is carried out this year.

It is known that President Joko Widodo (Jokowi) has included components of plastic excise duty and sweet drinks or packaged sugary drinks (MBDK) in the 2024 State Budget.

The decision is contained in Presidential Regulation (Perpres) Number 76 of 2023 concerning Details of the State Revenue and Expenditure Budget for Fiscal Year 2024 which was promulgated on Tuesday, November 28, 2023.

Based on the attachment to the Presidential Decree, the government has included a plastic excise target of IDR 1.85 trillion and a MBDK of IDR 4.39 trillion. Thus, the revenue target targeted from the plastic excise and excise duty of the MBDK this year reached IDR 6.24 trillion.

"If subject to excise duty of Rp. 1,771 per liter, the potential increase in the price of beverage products reaches 6-15 percent," said Director General of Agro Industry of the Ministry of Industry Putu Juli Ardika in the agenda of the Working Committee Meeting (Panja) Supervision of Processed & Ready-to-eat Food Products with the Fat Sugar Content of Commission IX DPR RI at the Parliament Complex, Jakarta, Monday, July 1.

Second, there are about 70 percent of consumers of Indonesian beverage products, the lower class who are vulnerable and sensitive to prices. Thus, the increase in product prices can lead to a very significant decline in sales.

Third, about 70 percent of sales of beverage products are carried out through traditional sales (small traders, stalls and so on) and beverage products contribute about 40 percent of their profits.

"The application of excise will increase product prices and have an impact on reducing the income of small traders, so that it has the potential to increase the poverty rate in Indonesia," he said.

Fourth, an increase in the number of unemployed due to the reduction in employees for efficiency in the face of a decrease in beverage production.

Fifth, the implementation of MBDK excise will contradict the spirit of increasing investment in Indonesia. According to Putu, this imposition of excise will make investors and potential investors choose not to invest in Indonesia.

"Overall state income has the potential to decrease because the government on the one hand gets additional excise income. However, on the other hand, sales tax revenue has decreased, corporate income tax and income tax," he said.