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Indonesia has officially postponed the implementation of its planned excise tax on sugary packaged beverages (Minuman Berpemanis Dalam Kemasan – MBDK) to 2026, citing unfinished regulatory frameworks and current macroeconomic pressures. The tax was initially scheduled for rollout in July 2025.
According to officials from the Directorate General of Customs and Excise (DJBC), the delay stems from the lack of supporting legislation and the need to balance public health priorities with broader economic considerations.
“It’s postponed to 2026,” said DJBC spokesperson Nirwala Dwi Heryanto, during a press briefing, emphasizing that regulatory groundwork remains incomplete.
A Dual-Purpose Tax: Public Health Meets Fiscal Goals
The MBDK tax was designed not only to reduce excessive sugar consumption — a growing concern in Indonesia — but also to contribute to government revenue. The Finance Ministry had projected the tax would generate Rp 3.8 trillion (~US$235 million) as part of a larger 2025 excise revenue target of Rp 244 trillion. The delay now leaves a gap in the fiscal roadmap.
To bridge the shortfall, the Ministry is considering alternative revenue streams, including adjustments to other excise categories and leveraging higher export levies amid rising crude palm oil (CPO) prices.
Economic Priorities and Policy Timing
At a recent fiscal policy briefing, Director General of Customs and Excise Djaka Budhi Utama acknowledged that, while the health rationale remains strong, current economic headwinds necessitated a strategic pause.
“For now, it will not be implemented in 2025. Maybe in the future,” he said.
Febrio Kacaribu, Director General of Fiscal Policy, reinforced that policy timing must align with macroeconomic stability. “MBDK is primarily a health policy, but it must be harmonized with broader economic priorities,” he stated.
Indonesia’s Growing Health Crisis
Health Ministry data underscores the urgency of sugar-related interventions. Non-communicable diseases (NCDs) are surging, with diabetes prevalence doubling over the last decade to 10% — affecting 28 million people. Meanwhile, over 28% of Indonesians exceed recommended sugar, salt, and fat intake, and nearly 96% consume insufficient fruits and vegetables. A staggering 35.5% are physically inactive.
The sugary drink tax was positioned as a key tool in addressing these health indicators by discouraging consumption of high-sugar beverages through targeted pricing.
Implications for Multinational Beverage Companies
The delay offers a short-term reprieve for beverage manufacturers, both domestic and multinational. However, with the excise tax now expected in 2026, companies must use this window to prepare: reformulate products, reassess pricing strategies, and enhance compliance readiness.
Conclusion: A Strategic Pause, Not a Policy Retreat
Indonesia’s decision reflects the political and economic complexities of implementing health-based taxation in emerging markets. While the delay may ease immediate fiscal pressure on consumers and businesses, the longer-term trajectory toward sugar taxation appears intact.
Multinational stakeholders should monitor developments closely, as Indonesia — like many nations — balances health objectives with economic resilience.
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