One in ten Indonesians suffers from diabetes. This was the result of a study by the International Diabetes Federation (IDF) four years ago. Since 2016, the Ministry of Finance has been poised to tackle the crisis by introducing an excise tax on packaged sweetened beverages (SBs). SBs taxes are an effective public health policy to reduce sweetened beverage consumption and, over time, will reduce the burden of non-communicable diseases (NCDs) like diabetes mellitus type 2. Yet the policy has remained on the shelf for nearly a decade, and has been postponed for a third time, despite promises that it would take effect in the second half of 2025.
It was the Director General of Customs and Excise, Djaka Budi Utama, who announced the cancellation and postponement of the plan less than a month after his appointment. Then, at the end of August the government and Commission XI of the Indonesian House of Representatives have agreed on an excise policy on packaged sweetened beverages (minuman berpemanis dalam kemasan/MBDK) to be come into effect in 2026. Following the agreement, 2026 State Budget includes excise on sweetened drinks as income budget to support efforts to control consumption of products that have negative externalities on health.
The question is: why hasn’t this been applied to packaged sweetened beverages, and what has stalled the implementation of a policy that has been discussed repeatedly? And, after the approval of 2026 budget, what the government should do to realise the policy?
Packaged Sweetened Beverages
One of the excise taxes currently attracting public attention is packaged sweetened beverages. Excessive consumption of these beverages have the potential to bring negative health impacts, leading to obesity, diabetes mellitus type 2 (DM2), and other non-communicable diseases such as heart disease, stroke, and even cancer, which are closely related to DM2. Many health experts, public policy experts, and the media have acknowledged this. Likewise, the Indonesian government is aware of the significant public health risks posed by high MBDK consumption and the burden the country will face if left unchecked.
For example, Rahmad Handoyo, a member of parliament said “In fact, my 18-year-old neighbor requires insulin injections due to his lifestyle. He drinks two to three packaged sweetened beverages a day, and this is impacting his health.
NCDs are the largest contributor to mortality in Indonesia. The Ministry of Health states that NCDs are responsible for 3 in 4 deaths in Indonesia. This trend has the potential to continue. According to 2021 data from the IDF, Indonesia has the fifth-highest number of diabetes mellitus sufferers in the world, at 19.5 million. This number is expected to increase to 28.6 million by 2045 if not addressed promptly, given its high prevalence. In 2023, according to Ministry of Health records, about 1 in 9 people have diabetes — and the number is still going up.
This potential increase can also be seen in the trend in sweetened beverage consumption. Over eight years (1996–2014), sweetened beverage consumption increased 15-fold, from 51 million liters in 1996 to 780 million liters in 2014. That’s like every Indonesian going from drinking about two (2) glasses of sweetened drinks a year in 1996 to nearly 30 glasses a year by 2014. Beyond the health impact, NCDs negatively affect economic productivity, place a heavy burden on public health systems, increase healthcare costs and impede sustainable development and poverty reduction efforts. Imagine the consequences if this trend is not immediately controlled.
Given such significant potential, it is understandable that the government has taken the initiative to expand the tax base to include SBs, alcohol, and cigarettes. By imposing excise on sweetened beverages, it is estimated that the consumption of sweetened beverages will decrease by almost 20% (CISDI, 2024).
Excise to uphold Health Rights
Health is a human right. Recognition of the right to health has been codified in various instruments and regulations, both global and national. These include the Universal Declaration of Human Rights, the International Covenant on Social, Economic, and Cultural Rights, the Convention on the Rights of the Child, and the Convention on the Elimination of all Forms of Discrimination Against Women CEDAW, which has become national law through various ratifications. The essence of the right to health is that “everyone has the right to the highest attainable standard of health, both physical and mental, throughout life.” This includes the right to healthy food, and that right extends beyond the freedom from illness. The same spirit can also be found in the Indonesian Constitution, Health Law No. 17/2023 and ratification of International Covenant on Economic, Social and Cultural Rights Law (ICESCR) No. 11/2005.
The Constitution states that the state bears primary responsibility for upholding human rights, which includes the responsibility to respect, protect, and fulfill the right to health, including the right to healthy food (Article 28 H (1) and 34 (3) of the Constitution and Article 8 in conjunction with Article 71 of the Human Rights Law). This obligation includes promoting and upholding human rights. It also requires the state to take the necessary steps to mobilize the necessary financial resources.
In this regard, the implementation of the MBDK excise tax is actually a realization of the state’s obligation. First, the imposition of excise on MBDK is part of the state’s obligation to protect all persons within its jurisdiction from potential violations by third parties, including ensuring that the food and beverages produced are healthy. This aligns with the view of the Committee on Economic, Social, and Cultural Rights, which encourages states to prevent the consumption of harmful substances, including unhealthy food and beverages (General Comment 14). By implementing the MBDK excise tax, the state issues legislation that protects the public from beverages that have the potential to cause NCDs.
Second, this action creates conditions for the fulfillment of the right to health. Health benefits can be achieved by preventing unhealthy consumption patterns. Experience in other countries has shown that this policy has been effective in reducing the consumption of high-sugar beverages, and raising consumer awareness of the dangers of excessive sugar consumption.
Third, this measure also generates revenue for the state. This revenue is allocated for improving the quality of public health, such as improving health services, raising public awareness of the harmful effects of excessive consumption of sweetened beverages, or improving nutrition programs. For example, it can be allocated to finance health services, including Diabetes Mellitus, which are covered by the National Health Insurance (BPJS). According to BPJS reports, the highest cost incurred by BPJS is for health claims due to NCDs. In a remote area of Central Sulawesi, the Tojo Una-Una Regency Health Office indicates that the number of diabetes sufferers in 2023 reached 9,775, and less than half of them were treated. Many diabetes sufferers remain untreated, and their condition is feared to worsen. The revenue from the MBDK excise tax can be used to address treatment gaps and prevent future NCDs.
With the MBDK excise tax, the state is fulfilling its obligation to maximize available resources (Article 2, ICESCR) to realize the fulfillment of the right to health. This aligns with the report of the UN Special Rapporteur on Health, who acknowledged that “a tax on sweetened beverages is a good practice for controlling sweetened beverages, the revenues of which can be allocated to support the gradual realization of the right to health and adequate food and nutrition.”
According to the Indonesian law, goods subject to excise duty are goods that require control, whose circulation needs to be covered, and that harm society and the environment. MBDK meets these requirements. For this it has to be regulated in Government Regulation. Thus, the next step the government should issue Government Regulation on Excisable Goods on Packaged Sweetened Beverages, which shall rule: (a) the scope of excise packaged sweetened beverages. i.e., that contains sugar above 5 grams / 240 ml, (b) when excise is due and who is responsible for excise; and (b) allocation of excise tax revenue from packaged sweetened beverages i.e. for improving the quality of public health.
Policy delay threatens Pubic Health
It is quite surprising that, despite five years of the House of Representative approval to implement an excise on sweetened beverages, the regulation has not yet been issued. The plan to impose an excise on SBs has been budgeted in the 2022 State Budget. In early 2025, the government issued Presidential Decree No. 4 of 2025, which mandated the issuance of a Government Regulation concerning the excise on sweetened beverages in 2025. However, as mentioned above, this plan has been postponed for the third time.
The failure to immediately implement the excise on sweetened beverages carries the risk of a continued increase in the prevalence of NCDs, especially among children. Of course, such risks cannot be viewed solely as individual issues or simply as a matter of treating disease. The extent of these risks must be viewed through the lens of how to keep society healthy, including by preventing the increase in NCDs such as diabetes, stroke, and heart disease.
The increase in the prevalence of NCDs mentioned above and the large number of diabetes sufferers should be seen as an “urgent call” to action. Furthermore, it emphasizes that the increase in NCDs cannot be addressed solely through education, increased knowledge, or public awareness. It must be accompanied by effective policies to control the consumption of MBDK.
Why was the Ministry of Finance Delaying?
For the past five years, the public has been showered with promises by the Ministry of Health and Ministry of Finance “excise will be implemented soon!” and “regulations regarding the MBDK excise will be issued soon.” After being postponed to 2023 and 2024, it was optimistically announced that the MBDK excise would be implemented in the second half of this year. Instead, the plan was postponed early in the second half.
Conversely, over the past five years, the public has been bombarded with persistent statements from the Ministry of Industry supporting the non-implementation of the excise, even as recently as last May. The narrative used was that the MBDK issue was a matter of consumer “free choice”. Its focus on individual choices fails to acknowledge the beverage industry’s influence over consumer’s diet patterns through tactics like aggressive marketing.
The next narrative focused on the impact of the MBDK excise on industry, namely “decreased consumption of packaged beverage products,” and cast doubt on the effectiveness of the MBDK excise. Whereas, according to the World Bank, over 100 jurisdictions have implemented sweetened beverage taxes, with growing evidence showing they reduce sweetened beverage consumption and can encourage healthier choices. Growing global evidence shows that there has been no documented link
between these policies and lower wages, reduced employment or any negative economic impacts.
These reasons and narratives are essentially the same as those put forward by industry associations such as the Indonesian Food and Beverage Association (GAPPMI), who seek to put profit over health by blocking or weakening policies that support healthier food systems.
The Ministry of Industry needs to remember that its primary task i.e., developing industry, is inseparable from its responsibility to improve the welfare of the Indonesian people. As the SBs excise tax will reduce consumption of SBs, it will also contribute to building a physically and mentally healthy young generation. The UN Special Rapporteur on Extreme Poverty, Oliver de Schutter, stated, the implementation of the MBDK excise tax is an effective government effort to prevent unhealthy consumption patterns while generating revenue. Following these evidences, SBs tax is therefore a win-win solution for governments. First it reduces NCDs, second, it reduces costs associated with NCD and third it generates revenue.
In reality, the implementation of excise taxes on foods and beverages with high sugar content is nothing new. Indonesia actually lags behind several other ASEAN countries, such as Brunei Darussalam, Malaysia, the Philippines, and Thailand, which have already implemented MBDK excise taxes (Murwendah & Salsabila 2024). Indonesia also lags behind Vietnam, which refused to delay the implementation of the excise tax on sweetened beverages.
Various opinions have been expressed, and various evidence has been presented, so it’s time to act. After more than five years of discussion, it’s time for the president to act— not just talk about it—to immediately issue a Government Regulation regarding the MBDK excise tax.
Antonio Pradjasto H. SH, L.LM
Human Rights and Democracy Activist
December 31 2025
