Jakarta. The Indonesian government is finalizing plans to introduce an excise tax on packaged sweetened beverages, with implementation targeted for 2026, the Finance Ministry said on Tuesday.

The ministry is drafting a tariff structure with reference to the average excise rate across ASEAN -- roughly Rp 1,771 ($0.1) per liter -- as the primary benchmark before determining the final rate.

“The ASEAN average is around Rp 1,771 per liter. This will serve as our reference to set a tariff that functions both as a revenue source and an instrument to control consumption,” said Febrio Kacaribu, Director General of Fiscal Policy, during a meeting with Commission XI of the House of Representatives.

Seven ASEAN countries -- Cambodia, Laos, Brunei, Thailand, the Philippines, Malaysia, and Timor-Leste -- have already imposed taxes on sweetened beverages. Globally, 115 jurisdictions have adopted similar policies.

The Indonesian excise, Febrio explained, will apply only to ready-to-drink packaged beverages and powdered or liquid concentrates sold in retail packaging.

Drinks prepared and consumed on-site, such as sweet iced tea sold in food stalls, will not be taxed.

The government sees the excise as necessary to reduce excessive sugar consumption, amid rising rates of non-communicable diseases such as diabetes and obesity. These illnesses have increased national healthcare costs -- including the financial burden on BPJS Kesehatan, the national health insurance system.

“This instrument is designed to control consumption while encouraging the industry to produce lower-sugar products,” Febrio said.

Tariff Not Final
Despite the advanced stage of the study, the government has not yet finalized the official tariff. The proposal is still undergoing cross-ministerial evaluation to assess its potential impact on the economy and household purchasing power.

“The excise on sweetened beverages remains under government discussion. Our short-term priority is high economic growth, not adding new charges,” Febrio noted.

He stressed that implementation will take into account broader macroeconomic conditions -- including the government’s target to sustain 5.2 percent GDP growth in 2025.

“When economic dynamics improve, that will be the right moment to apply this excise,” he concluded.

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