Jakarta. Indonesia plans to introduce an excise tax on sweet beverages (MBDK), projected to generate Rp 6.25 trillion ($385.24 million) in revenue, according to Telisa Aulia Falianty, an economist from the University of Indonesia.

The tax is regulated under Government Regulation (PP) No. 28/2024, implementing Law No. 17/2023 on Health.

Telisa said various proposals have been made for the excise rate. The State Financial Accountability Agency (BAKN) of the House of Representatives has suggested a 2.5 percent excise rate. Meanwhile, the government has proposed fixed rates: Rp 1,500 per liter for packaged sweetened drinks like soft drinks, bottled tea, and energy drinks, and Rp 2,500 per liter for concentrates or extracts, such as syrups.

Telisa highlighted the tax's significance for public health, particularly in addressing the growing prevalence of diabetes, which imposes significant health and economic burdens on the state.

"Diabetes increasingly affects younger populations, posing a serious threat to the nation’s future," she said.

The government has not announced when the tax will take effect. Telisa urged clarity on the timeline to allow public health efforts and beverage producers adequate preparation time.

"Factories need time to adjust their production processes," she explained.

Telisa also advised against implementing the tax in early 2025, given the government's planned increase in value-added tax (VAT) to 12 percent starting Jan. 1. She proposed introducing the excise tax in 2026 to ensure a smoother transition and sufficient preparation.