PETALING JAYA: Malaysia, which is set to raise taxes on sugary drinks in Budget 2025, is one of 124 countries that have implemented a tax on sugar-sweetened beverages (SSB).
According to the latest figures from the World Bank’s Global SSB Tax Database, 119 countries have imposed the SSB tax at the national level. Five other countries have implemented the tax at a sub-national level.
Malaysia is one of six Asean countries with a sugar tax. The others are Brunei Darussalam, Cambodia, Laos, Philippines, and Thailand.
Malaysia currently imposes a tax of 50 sen per litre for three categories of beverages.
They are carbonated, flavoured, and non-alcoholic drinks with more than 5 grams of sugar per 100ml; milk-based drinks with more than 7 grams of sugar per 100ml; and fruit and vegetable juices with more than 12 grams of sugar per 100ml.
On September 10, Health Minister Datuk Seri Dr Dzulkefly Ahmad said a further increase to the sugar tax would be announced in the upcoming Budget 2025 that will be tabled on October 18.
He said planned hike follows the success in reducing sugar consumption by 9.25% nationwide after a 10 sen increase in the sugar-sweetened beverage tax under Budget 2024 to the current 50 sen per litre.
Malaysia currently has the highest prevalence of diabetes in South-East Asia.
The structure and scope of the sugar tax varies among the countries, but the World Bank said that they serve to reduce sugar consumption and improve public health.
“SSB taxes work to reduce sugar consumption and improve public health by increasing retail prices, raising public awareness, incentivizing sugary beverages reformulation, and generating government revenue,” the international financial institution said in a report titled Taxes on Sugar-Sweetened Beverages: Summary of International Evidence and Experiences.
Consultant dietitian Ng Kar Foo said Malaysia should consider expanding the coverage of the sugar tax to include more items.
“Broadening the tax to include a wider range of sugary beverages and even foods high in sugar would greatly enhance our efforts to reduce sugar consumption and improve public health,” he said.
Another strategy that can be considered is to tighten the sugar limit or threshold in the beverages before they can be taxed.
“Reducing the threshold for milk-based drinks from 7 grams per 100ml to 5 grams per 100ml, for example, would expand the range of taxable products.
“This approach also will provide stronger incentives for both manufacturers and consumers to cut down on sugar,” he explained.
“This adjustment would help Malaysia align more closely with global best practices and strengthen its efforts to combat rising rates of obesity, diabetes, and other sugar-related health conditions and create a bigger impact for public health improvement,” he said.
Center for Market Education CEO Carmelo Ferlito meanwhile suggested a tax based on the amount of sugar in a product.
“Instead of charging the same tax on all sugary drinks, the idea is to tax drinks based on how much sugar they actually contain.
“The more sugar a drink has, the higher the tax would be,” Ferlito said.
In the United Kingdom, for instance, manufacturers of soft drinks with more than 5 grams of sugar per 100ml are subjected to a levy of ₤0.18 a litre, while those exceeding 8g per 100ml incurred ₤0.24 a litre for sugar content.
“This approach is meant to help reduce harm from sugar by encouraging people to choose drinks with less sugar, and it would push companies to make drinks with lower sugar content to avoid higher taxes,” he said.
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