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Soda tax in Malaysia highly likely this time

Image credit: Mini Me Insights

The Malaysian Prime Minister Tun Dr Mahathir has made it public that the Malaysian government is looking at the possibility of introducing the soda tax to safeguard people’s health and to plug a hole in the government’s budget. “The diabetes rate in Malaysia is very high because we take too much sugar,” said Mahathir on 27 August 2018.

The announcement indicates the chance of a soda tax is high. Previous announcements were made at the ministerial level but were never rolled out.

Around 17.7% of the adult population aged 18 and above are obese, according to the National Health and Morbidity Survey 2015.

In Southeast Asia, soda tax has been introduced in Thailand, Brunei and the Philippines but not in Indonesia, Malaysia and Singapore.

The proposed soda tax will be a double whammy for the beverage industry in Malaysia, which is still suffering from depressed sales, as the government is likely to impose the sales and services tax (SST) on sweetened beverages from 1 September 2018. The proposed rates of the SST and the final exempted-list will be known on 1 September 2018, said Customs Department director-general Datuk Seri Subromaniam Tholasy.

Manufacturers and retailers will not have adequate time to prepare for the SST since the final list will only be made known on 1 September 2018, the day the SST is to be implemented.

Hopefully, the government will provide tax exemption to artificial sweeteners and natural sweeteners (stevia and coco sugar) as well as increase the ceiling for taxable drinks to those with a sugar content of over 6g per 100ml to motivate companies to embrace the Healthier Choice program.


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