Malaysia’s war on sugar, taxing sweetness for healthier future

SHAH ALAM - As Malaysia intensifies its efforts to combat high sugar consumption, the recent announcement of the sugar tax in Budget 2025 has sparked discussions about its potential impact.

Prime Minister Datuk Seri Anwar Ibrahim said excise duty on sugar-sweetened beverages (SSB) will increase by 40 sen per litre, bringing the total to 90 sen starting Jan 1, 2025.

This measure expanded on the sugar tax introduced in 2019, which aimed to address the country's alarming rates of diabetes and obesity.

The urgency for such a tax was highlighted by findings from the National Health and Morbidity Survey (NHMS) 2023, which revealed that approximately 15.6 per cent of Malaysia's adult population or around 3.6 million individuals were diagnosed with diabetes, marking one of the highest rates in the Western Pacific region.

Over half of the adult population was classified as either overweight or obese, highlighting a critical public health challenge and the sugar tax aimed to reduce excessive sugar consumption linked to non-communicable diseases.

Malaysia was not alone in this initiative; it was part of a global trend where at least 54 countries have implemented similar taxes on sugary beverages to mitigate rising diabetes rates, according to research from the Obesity Evidence Hub

Its online portal indicated that countries like the United Kingdom (UK), South Africa and Mexico have seen positive public health outcomes from such measures.

For instance, the UK's Soft Drinks Industry Levy has led many manufacturers to reformulate their products, resulting in lower national sugar consumption and reduced healthcare costs associated with obesity-related diseases.

Local media The Rakyat Post reported that since its introduction in 2019, studies have indicated that the tax has successfully deterred overconsumption of sugary drinks, with a reported 9.25 per cent reduction in consumption nationwide after previous increases.

The revenue generated from this tax was earmarked for public health initiatives, including diabetes treatment and support for dialysis centres.

Another research from the World Bank indicated that SSB taxes effectively reduced sugar consumption and improved public health by increasing retail prices, raising public awareness and incentivising manufacturers to reformulate their products.

Countries like the UK and Mexico have seen positive outcomes from such measures.

For instance, Mexico saw an 11 per cent decrease in sugary drink consumption within a year of implementing its volumetric SSB tax.

Health Minister Datuk Seri Dr Dzulkefly Ahmad in his previous statement suggested that further increases in the sugar tax could enhance its effectiveness.

Recommendations included expanding the coverage of the tax to include more sugary beverages and foods high in sugar, as well as tightening the thresholds for taxable products.

For example, reducing the threshold for milk-based drinks from seven grammes to five grammes of sugar per 100ml could broaden the range of taxable items and encourage healthier choices among consumers.

Despite these efforts, skepticism remained regarding the long-term effectiveness of Malaysia's sugar tax.

Questions arise about whether this tax will lead to lower prices for healthier options and how current sugar subsidies might offset their intended impact on consumer behaviour.

It was reported that the Galen Centre for Health and Social Policy had pointed out that while the SSB tax was expected to generate around RM400 million in revenue, this amount may fall short of covering existing subsidies.

As Malaysia embarked on this renewed "War on Sugar", it became clear that merely imposing a tax would not suffice.

Lessons from other nations indicated that comprehensive strategies, including product reformulation, increased health awareness campaigns and incentives for healthier choices were essential for achieving lasting improvements in public health outcomes.

Without such multifaceted approaches, there was a risk that the sugar tax could become another well-meaning yet ineffective policy in addressing non-communicable diseases.

While Malaysia's increased sugar tax represented a proactive step towards addressing public health concerns related to sugar consumption, it must be accompanied by broader strategies to ensure its effectiveness and sustainability in fostering healthier lifestyle choices among Malaysians.