Indonesia plans to tax sugary drinks, polluting vehicles, plastic bags

VNA
Indonesian Finance Minister Sri Mulyani Indrawati has proposed new duties on sweetened drinks, polluting vehicles and plastic bags, to control consumption of the products in Southeast Asia's largest economy.

Indonesia's Finance Minister Sri Mulyani Indrawati attends the World Economic Forum on ASEAN at the Convention Center in Hanoi, Vietnam September 12, 2018. (Photo: Reuters)

Indonesia's Finance Minister Sri Mulyani Indrawati attends the World Economic Forum on ASEAN at the Convention Center in Hanoi, Vietnam September 12, 2018. (Photo: Reuters)

The proposal is to levy excise taxes ranging from 1,500 rupiah to 2,500 rupiah (US$0.11-0.18) per litre on sugary and artificially sweetened beverages such as bottled tea, coffee, carbonated soft drinks and energy drinks, the minister said at a meeting with members of the House of Representatives’ finance commission.
The aim is to cut consumption of sweet drinks in the context that the prevalence of diabetes and obesity levels has steadily increased in the past decade, according to the minister.
At the meeting, she also proposed to impose an excise tax of 30,000 rupiah per kilo or 200 rupiah per bag on plastic bags. The levy, though small, can halve Indonesia's consumption of plastic bags to 53,533 tonnes a year, she said.
According to Minister Indrawati, the government also wants to impose duties on new vehicles that emit carbon dioxide as part of efforts to control pollution. The tariffs will vary depending on emission levels and other aspects, she said, without providing details.
The total additional revenue expected from all three measures per fiscal year is 23.56 trillion rupiah (about $1.72 billion), including 1.61 trillion rupiah from plastic bags, 6.25 trillion rupiah from drinks and 15.7 trillion rupiah from vehicles, she said.
However, she did not mention when the government plans to begin collecting the excise taxes.

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