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In brief

The consumption of Sugar-Sweetened Beverages (Minuman Berpemanis Dalam Kemasan or MBDK) in Indonesia has risen significantly in the past 20 years, making Indonesia the third highest consumer of MBDK in Southeast Asia in 2020.1 The high MBDK consumption may have numerous health implications (e.g., diabetes, obesity, liver and kidney damage, heart disease) that will significantly impact Indonesia’s health and social and economic development.


  1. In more detail 
  2. Overview of excise revenue in APBN
  3. MBDK excise imposition 
  4. The impact of MBDK excise

In more detail 

To deal with this issue, Indonesian government has included excise revenue from MBDK in this year’s State Revenue and Expenditure Budget (Anggaran Pendapatan dan Belanja Negara or APBN). This is because the government deemed that MBDK can qualify as excisable goods. Although it has been stipulated in the APBN, excise on MBDK has not yet been implemented.

In line with the explanation above, the Minister of Finance (MOF) along with Commission IX of the Indonesian House of Representatives (Dewan Perwakilan Rakyat or DPR) has agreed to impose excise on MBDK and will issue a regulation or decree on this matter. However, the Director General of Customs and Excise confirmed that the excise on MBDK is expected to take effect next year, considering Indonesia’s current economic condition, which is starting to recover after the COVID-19 pandemic.2 There is also no further confirmation from the MOF when this policy will actually be implemented.

Overview of excise revenue in APBN

Under APBN 2021, the government targeted state excise revenue of IDR 180 trillion. This year, the target has risen to around IDR 203 trillion. The following table shows the increase for different categories of products:

No. Excise AllocationTarget Revenue
APBN 2021APBN 2022
1.Excise from tobacco productsAround IDR 173 trillionAround IDR 194 trillion
2.Excise from ethyl alcohol or ethanolAround IDR 156 billionIDR 190 billion
3.Excise from drinks containing ethyl alcoholAround IDR 5 billionIDR 6.8 billion
4.Excise from plasticsIDR 500 billionIDR 1.9 trillion
5.Excise from MBDKIDR 1.5 trillion

We can see that the excise revenue in APBN 2021 had only four income sources, namely tobacco products, ethyl alcohol or ethanol, drinks containing ethyl alcohol, and plastics. Tobacco products contributed greatly to last year’s excise revenue, accounting for 96.5% of the total excise revenue.

APBN 2022 contains a new source of excise revenue. The financial notes of APBN 2022 specify that the addition of excise revenue on MBDK is a part of Indonesia’s fiscal policy to increase and optimalize the state’s income. However, those notes do not explain what underlies the imposition of excise on MBDK (i.e., the purposes and objectives of imposing excise on MBDK). Because the Director of Customs and Excise has just confirmed that the excise duty on MBDK will not be imposed this year, surely this year’s target on excise revenue from MBDK will not be reached.

MBDK excise imposition 

According to the Center for Indonesia’s Strategic Development Initiatives (CISDI), MBDK has met the excisable goods requirements, namely (i) its consumption needs to be controlled, (ii) its distribution needs to be supervised, (iii) its use may have a negative impact on the public or the environment,  and (iv) its use requires the imposition of state levies, and therefore excise should be imposed on MBDK.3

CISDI believes that the restriction of MBDK consumption through excise policy and marketing arrangements, and limiting MBDK availability in public places may make a significant contribution to overcoming health problems in Indonesia.4 The government also plays a big role in controlling MBDK distribution through the prevailing law.

In June 2022, the MOF along with Commission IX of the DPR agreed to add several categories of excisable goods, one of which is MBDK. The MOF explained that the imposition of MBDK excise is in accordance with Indonesia’s financial reform. MBDK excise is also a form of implementing Indonesia’s harmonization tax law.5

Although CISDI recommends that the government impose an MBDK excise tariff of 20%,6 the MOF explained that the excise tariff on MBDK will depend on the sugar and artificial sweetener contents. The tariff will increase if the content of sugar or artificial sweeteneer in a product is higher.7

Until now, there is no information on when the MBDK excise will be implemented, but it is likely take into effect next year as stated by the Director of Customs and Excise.

The impact of MBDK excise

Based on CISDI’s research, MBDK excise is a cost-effective fiscal instrument to (i) reduce MBDK consumption, (ii) educate the public on the importance of reducing MBDK consumption, (iii) contribute substantively to the state’s income and (iv) contribute to the long-term improvement of public health.8 MBDK excise imposition is also considered as an incentive for food and beverage businesses to reformulate their products by reducing the sugar content and promoting alternatives to low-sugar products.

The Deputy Chair of Commission IX of the DPR explained that the imposition of MBDK excise could increase the state’s revenue optimally. The funds collected from this excise will be used to handle the impact of MBDK consumption.9 For instance, the MBDK excise revenue has the potential to cover the Healthcare and Social Security Agency (Badan Penyelenggara Jaminan Sosial Kesehatan or “BPJS Kesehatan“) payment deficit, especially due to the high medical costs caused by obesity, diabetes and other non-communicable disease.10

On the other hand, MBDK excise may harm Micro, Small and Medium Enterprises (Usaha Mikro, Kecil dan Menengah or UMKM). The implementation of MBDK excise may cause an increase in production and logistics costs that will reduce consumer demand, resulting in significant losses for business actors. The government needs to take this into account considering that UMKM in Indonesia are still struggling to recover after the COVID-19 pandemic.11

As seen above, the imposition of excise on MBDK in Indonesia has its pros and cons. The government needs to carry out more comprehensive research on this, by not only considering the views of competent authorities, but also those of the relevant business actors, with the aim of implementing MBDK excise optimally.

1 Gita Kusnadi,, Ringkasan Kebijakan: Urgensi Implementasi Kebijakan Cukai Minuman Berpemanis Dalam Kemasan (MBDK) di Indonesia, (CISDI: Jakarta, 2022), pg. 2.

2 Kompas,, Kontan,

3 Gita Kusnadi,, Ringkasan Kebijakan… pg. 6.

4 Gita Kusnadi,, Ringkasan Kebijakan… pg. 2.

5 Ekonomi Bisnis,,

6 Gita Kusnadi,, Ringkasan Kebijakan… pg. 11.

7 Legal Centric,

8 Gita Kusnadi,, Ringkasan Kebijakan… pg. 11.

9 Ekonomi Bisnis.,

10 Gita Kusnadi,, Ringkasan Kebijakan… pg. 9.

11 The Indonesia Institute, .

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Riza F. Buditomo is a partner in Hadiputranto, Hadinoto & Partners' Tax & Trade Group in Jakarta. He focuses on corporate commercial and tax, and trade matters including export/import, customs, supply chain, food industry, direct-selling, anti-dumping, and corporate commercial work.


Nandina Kusumaningrum is a Trade Specialist in Hadiputranto, Hadinoto & Partners, Jakarta office.

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