PETALING JAYA: The tax on sugary drinks is helping Malaysians make healthier choices, as a study has shown the move was effective in deterring overconsumption of sweet beverages.
The Health Ministry said the tax on sugar-sweetened beverages, imposed since July 2019, had reduced the consumption of such drinks.
The tax covers three categories: carbonated and non-carbonated drinks, milk-based products, and fruit and vegetable juices with sugar content.
“After two years and six months of implementing the tax, the findings of a study suggested it was relevant and effective.
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“To maximise its effectiveness, there was a recommendation to increase the tax rate,” the ministry said when contacted.
The current excise duty for sugary drinks is 40 sen per litre, which is 8.33% of the retail price of such beverages.
Under this rate, a 9.25% reduction in consumption was estimated, said the ministry.
Next year, the tax will be increased to 50 sen per litre, as announced by Prime Minister Datuk Seri Anwar Ibrahim while tabling Budget 2024.
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The revenue from the tax hike will be used for the treatment of diabetes and support for dialysis centres.
Initially, the ministry said there were suggestions to follow recommendations by the World Health Organisation (WHO) to increase the excise duty rate by a minimum of 20% of the retail price to cut the consumption of sugary drinks by as much as 21%.
“Even though it falls short of the WHO’s ideal recommendation, Malaysia’s tax hike is a step towards achieving healthier beverage consumption patterns.
“This approach aims to make sugary drinks less attractive by increasing their cost and encouraging consumers to opt for healthier alternatives,” the ministry said.
It added that the move was also found to encourage healthier products, as the tax has pushed beverage companies to reformulate up to 50% of their drinks by cutting down the sugar content.
With World Diabetes Day today, the ministry said the disease is expected to affect seven million Malaysian adults aged 18 and above by 2025.
“The growing prevalence of diabetes in Malaysia is a result of a variety of causes, including population expansion, behavioural shifts, population ageing, urbanisation and rising rates of obesity and physical inactivity,” it added.
To tackle the disease and other problems, the ministry said a Health White Paper is being developed to formulate major changes to ensure the Malaysian health system will be able to meet the country’s growing health needs.
“These important changes need to be implemented in stages.”
