Sweetened Drinks Rejected by businessmen but Supported by Doctors – The Ministry of Finance proposes the imposition of excise for sweet drinks as an effort to control diabetes and increase state revenue. This proposal received mixed reactions.
The Ministry of Health and the House of Representatives Commission XI expressed support as an effort to control diabetes and increase state revenue.
But a combination of food and beverage entrepreneurs refused because it would erode their income and have an impact on tax cuts of Rp700 billion.
Previously, the plan to impose excise tariffs on sweetened beverage products was conveyed by the Minister of Finance, Sri Mulyani, in a joint working meeting with the DPR’s Commission XI.
Sri Mulyani said that the proposal was based on the problem of diabetes which was the third leading cause of death in Indonesia with an estimated number of 10 million people. Bandar Ceme Bonus Deposit
“The prevalence of diabetes mellitus and obesity has almost doubled in the span of 11 years,” said Minister of Finance, Sri Mulyani,
For sweetened drinks such as packaged tea, the excise tax will be charged at Rp1,500 per liter. While carbonated beverage products or soda and coffee concentrates reach Rp2,500 per liter.
The application of excise duty is only intended for manufacturers and importers. While small and medium businesses or home, will be excluded.
In Sri Mulyani’s calculation, if the proposal was granted, then the potential for state revenue could reach Rp6.25 trillion.
But the General Chairman of the Indonesian Food and Beverage Entrepreneurs Association (Gapmmi), Adhi S Lukman, openly refused because it would erode their turnover. That means the country will lose tax revenue of around Rp700 billion.
Another thing is that the plan was not timely due to the economic slowdown.
“We regret that in the midst of a bad economic situation, it will add to the burden on industry,” Adhi S Lukman told the BBC on Thursday (20/02).
“Imposition of this excise will reduce sales and reduce state revenue because of the pph of the body, pph 21, and VAT will decrease dramatically. So that between the tax revenue and the reduction of other taxes, yes the tax reduction is greater,” he continued.
Gapmmi notes, there are at least six thousand medium and large companies and 1.6 million small businesses that produce sweet drinks and soda.
When referring to the data, he questioned the government’s intention to control diabetes in Indonesia. Because the imposition of excise tax is only directed at manufacturers whose numbers are smaller than those of small or home-based businesses.
“So this is seeking acceptance or controlling? If controlling, it’s not right because there are still 1.6 million,” he concluded.
In addition, large-scale entrepreneurs have slowly reduced or even replaced the sugar ingredients in their products so that it is good for health. In contrast to small businesses, he said.
“Medium and large businesses are making various efforts, for example reformulating using ingredients that are good for health and reducing the use of sugar.”
“For example the use of stevia as a substitute for low calorie sugar.”
In the Gapmmi calculation, the excise tax of Rp1,500 and Rp2,500 was too burdensome. He estimates, the selling price will increase by around 30% -40%.
“The carbonated bottled beverage assumes the price of Rp. 5,000, if added to the excise, the production price will increase by 40%. The price at the consumer will increase to Rp. 7,000 to Rp. 8,000.” Sweetened Drinks Rejected
Therefore, he will send a letter to the Ministry of Finance to discuss the issue in order to find a middle ground.
“Because we have never been invited to speak about the purpose of this excise. But we, if the government’s goal is to reduce obesity, we will support to educate and look for new materials.