How Increasing Sugar Tax Could Be Profitable in Indonesia Government

Emily Bourke from The University of Queensland, has studied Indonesia tax model. In the research, published in BMJ Global Health, shown that drink taxes can help slow the growth in obesity and reduce chronic diseases. Moreover, growing market for soft drinks and energy drinks, Indonesia will be enormously obtain benefits from this tax.

According to Indonesian, the problems of obesity, diabetes, heart disease and stroke are major health concerns in middle-income countries.
For example, it was observed that in 2018, 35.4% of Indonesians were overweight or obese. Ten years earlier, over 5% were living with diabetes. This is because increasing sugar consumption, the major cause is linked to sugary drinks.

Soft drinks and energy drinks market seem to be rapidly growing. The total sales are expected to be US$12.9 billion in 2019, or it takes for an average 39 liters per person, and approximately growing around 8-10% each year.

Therefore, the Indonesian government has considered taxing sugary drinks to solve the increasing health problems, and it would be economically benefit towards government.

In the research, published in BMJ Global Health, estimates how much benefit taxing sugary drinks could bring to Indonesia. To find the results, were estimated by income group, from the poorest 20% to richest 20%. It is found that over 25 years the tax paid by the poorest people would be $0.5 billion, and $15.1 billion for the richest.

Consequently, Sugar tax can help to reduce the number of overweight and obese, and prevent over a million cases of diabetes in Indonesia. The tax would raise $920 million in the first year and $27.3 billion over 25 years.

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