Malaysia to introduce tax on sugary soft drinks and juices

MALAYSIA – Malaysia is set to introduce a tax on ‘high sugar’ beverages including juices and soft drinks effective 1 April 2019 to help address the country’s levels of obesity and sugar related diseases.

Finance Minister Lim Guan Eng announced that the government will introduce an excise duty of MYR 0.40 ($0.10) on beverages containing more than 5g of sugar per 100ml and juices that contain more than 12g of sugar per 100ml.

The idea of adding a sugar tax was first mentioned back in August when Malaysia’s prime minister Tun Dr Mahathir Mohamad hinted that a tax might be implemented to help combat the country’s increasing obese epidemic.

Excluded from the new tax are all milk products, 100% natural fruit or vegetable juices, meal replacement and medically-indicated products and ground coffee.

According to the World Health Organization (WHO), a tax on sugary drinks is a solution that provides both fiscal and health benefits.

WHO said: “A tax on sugary drinks is not a silver bullet, and it is certainly not the only measure needed to address the obesity crisis.

However, it would have a direct impact on consumption of sugary drinks.

“When implemented in combination with other measures – such as education, subsidies on healthy foods, nutrition labelling, and food marketing regulations – the cumulative impact on obesity would be strong.”

It is estimated that nearly half of adults in Malaysia are overweight or obese.

Malaysia joins other countries around the world who are implementing some form of tax on sugary drinks, including Brunei, France, Mexico, Saudi Arabia, Thailand and UK.

Studies from the United Kingdom, Chile and Mexico which have implemented this measure have shown that in the short term, young consumers (between 13-30 years) who are price-sensitive will very likely reduce their sugar consumption by up to 80%.

However, in Ireland where the tax has already taken effect, the Irish trade association, Food Drink Ireland (FDI) released a report saying that product reformulation rather than taxes has been critical in reducing lifestyle diseases.

The report indicated that significant reductions in fat, saturated fat, sugar, salt and calories in light of rising obesity rates across Europe were attributed low diabetes and obesity cases.

High in calories, an overconsumption of sugar contributes not only to excessive weight gain but also to insulin resistance, nerve damage and the thickening of artery walls.

With all these factors in place, a person who consumes too much sugar daily will be at high risk of developing obesity, diabetes, kidney failure, heart disease and even cancer.

Apart from delivering significant impact on public health, the sugar taxes would provide a steady revenue for the government and overall sugar consumption.

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