Observers Of The Value Of Small And Medium Industries Need To Be Freed From Excise On Managed Drinks

Illustration (Photo: Doc. Antara)

JAKARTA - Center for Indonesian Policy Studies (CIPS) researcher Hasran assessed that small and medium industries (IKM) need to be exempt from excise on packaged sweetened drinks (MBDK) to prevent a decrease in sales volume and price increases.

"The MBDKCkai is an old discourse whose implementation is planned for 2023. The declaration target takes into account the condition of national economic recovery and people's purchasing power," said Hasran, quoted from Antara, Tuesday, November 22.

Hasran said this policy also adds to the burden on consumers because excise duty will be distributed directly to consumers through price increases instruments, so it is feared that it will have the potential to reduce consumer interest in consuming products.

The imposition of excise rates for sweetened drinks will be based on the sugar content and artificial sweeteners contained in it. So, the higher the sugar level, the higher the excise amount will be.

Because of this, it is likely that the big and medium industry (IBS) of the food and beverage sector will choose to reform their products with lower sugar levels.

However, the company also needed time to take this step considering the risks posed were also quite significant.

So far, the position of IKM in the food and beverage sector in the MBDK excise is still unclear because the subject of MBDK excise duty has not yet been determined.

However, if the subject is expanded to IKM, this policy will increase the burden caused by the pandemic and increase in subsidized fuel prices.

"The government needs to provide certainty of the time for the implementation of MBDK excise regardless of any conditions that Indonesia will face. The certainty of this time is also important to eliminate uncertainty or uncertainty that has the potential to affect the attitude of IBS investors in the food and beverage sector," he said.

BPS data shows that the food and beverage industry is one of the industries that grew positively during the COVID-19 pandemic.

During the four consecutive quarters of 2020, his contribution to Indonesia's GDP grew by 3.94 percent, 0.22 percent, 0.66 percent and 1.66 percent respectively (yoy).

However, this increase was supported by growth in IBS which was only 1 percent of the total business units of the food and beverage industry throughout Indonesia.

Along with the Covid-19 pandemic in 2020, many food and beverage sector IKMs have stopped operating.

BPS data shows that in 2020, the small industry of beverage sector micro funds experienced a decline in production during four consecutive quarters in 2020.

Likewise, the food sector IBS experienced a decline in production in each quarter.

"When the national economy begins to recover, many business actors in this sector will return to operating their businesses. However, they are again faced with other challenges, such as an increase in subsidized fuel prices. The MBDK tariff that will be applied later will definitely increase the burden on production costs," added Hasran.