Why Are We Going To War Against Sugar And Why Must I Pay For It?

Malaysia is not the only country implementing a sugar tax but there are other things to consider to make sure the War on Sugar isn’t just all talk and good intentions only.

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During the Budget 2025 announcement, Prime Minister Datuk Seri Anwar Ibrahim announced that there’ll be an excise duty on sugar-sweetened beverages (SSB) of up to 40 sen per litre starting from 1 January 2025. The current sugar tax is 50 sen per litre as listed in Budget 2024.

In other words, the War on Sugar is on once more. There have been talks about taxing sugar since Malaysia has a serious “sugary” problem. Malaysia has the highest rate of diabetes in the Western Pacific region and one of the highest in the world.

According to the National Health Morbidity Survey (NHMS) 2023, over half of the adult population in Malaysia are either overweight or obese. About 15.6% of the country’s adult population (3.6 million adults) in the country have diabetes.

Thus, the tax in place hopes to discourage the Malaysian public from consuming more sugar (it’s everywhere) to tackle diabetes and other non-communicable diseases.

The sugar tax aka the SSB tax was first introduced in July 2019 and is still being observed today. It affected imported and manufactured drinks in Malaysia: beverages containing more than 5g of sugar per 100ml and fruit juice or vegetable-based drinks with over 12g of sugar per 100ml. However, drinks prepared and served at eateries were exempt from the existing sugar tax.

Do other countries have sugar tax?

According to Obesity Evidence Hub, at least 54 countries have implemented taxes on sugar-sweetened beverages. High-quality studies from countries like the United Kingdom, South Africa, and Mexico showed that the SSB tax successfully reduced sugar consumption and obesity rates.

The SSB tax also led to nationwide changes such as companies reformulating their products with less sugar content and saving the country’s healthcare costs.

In the UK, the SSB tax is known as the Soft Drinks Industry Levy which was introduced in April 2018.

The UK tax is a two-tiered levy that taxes producers based on a drink’s sugar concentration.

Drinks containing more than 8g of sugar per 100ml are taxed at £0.24 per litre and those containing 5 to 8g per ml of sugar are taxed at £0.18 per litre. The tax was only passed on to consumers for drinks with more than 8g sugar per 100ml. However, the tax did not include most drinks made with fruit juice or pureed fruit without other added sugar.

In South Africa, the SBB tax known as the Health Promotion Levy was implemented on sugary drinks except fruit juices in 2018. South Africa has a unique design based on sugar content. Each gram of sugar exceeding 4g per 100ml of beverage is subject to a 10% tax.

Meanwhile in Mexico, a volumetric SSB tax of 1 Mexican peso per litre of sugar-sweetened beverages was implemented on non-alcoholic sweetened beverages in 2014. The price increase of drinks was about 11% for soft drinks and a slight increase for other sweetened beverages. It successfully lowered SSB consumption and purchases in Mexico.

Brown sugar is white sugar added with molasses. Both are nutritionally about the same although brown sugar contains slightly more minerals. Image: Freepik

What about Southeast Asian countries?

Thailand, Malaysia’s neighbour in the north, also has an excise tax on sugar-sweetened beverages with an amended tax structure which came into force in 2017.

Thailand classified six levels of sugar content in beverages per 100ml: below 6g, 6-8g, 8-10g, 10-14g, 14-18g, and more than 18g. Sugar content that’s less than 6g is tax-exempt.

The rest of the tax structure is as follows:

Sugar content between 6-8g/100ml: 30 satang/litre
8-10g/100ml: 1 baht/litre
10-14g/100ml: 3 baht/litre
14-18g/100ml: 5 baht/litre
Above 18g/100ml: 5 baht/litre

However, Malaysia’s neighbour Singapore is the minority for not taxing sugar-sweetened beverages.

Singapore’s Health Minister Ong Ke Yung argued against the SSB tax because sugar is a commonly used product. He said if sugar is “bad”, then the extreme lengths would include taxing salt and oil, which taken in excess affects health as well.

Instead, Singapore encouraged healthier choices with the Nutri-grade labelling system for sugary drinks with Grade A as the healthiest to Grade D being the least healthy.

Failure to comply with the regulation may result in a complete ban on advertising their products in the country.

Some questions still remain regarding the SSB tax

While it’s great to work together for the good of all, the question still remains on many people’s minds: Does the sugar tax mean drinks with less sugar would be cheaper? Will our teh tarik and bubble milk tea be slightly cheaper?

Also, the SSB tax may not make much of a difference in the War on Sugar because sugar manufacturers still enjoy subsidies or incentive payments of up to RM500 million to RM600 million yearly.

Galen Centre for Health and Social Policy chief executive Azrul Mohd Khalib said the SSB tax will likely collect RM400 million, which is way short of the cost of subsidising sugar.

Azrul added that the revenue could have been used to invest in improving health education, preventive health interventions, and healthy breakfast programmes for school children as was the original plan when the tax was first imposed in 2019.