Jakarta – Indonesia’s Finance Minister has scrapped a planned excise tax on packaged sweetened beverages, a policy shift impacting both public health initiatives and projected state revenue. The tax, estimated too generate Rp 7 trillion (roughly $450 million USD), was intended to discourage consumption of sugary drinks and bolster government funds, but was ultimately deemed premature given current economic conditions [[1]]. Industry stakeholders have welcomed the decision, citing potential economic fallout, as Indonesia continues its transition toward a more industrialized economy [[1]].
Jakarta –
Indonesia’s Finance Minister has reversed a planned excise tax on packaged sweetened beverages (PSB), a move welcomed by the country’s food and beverage industry. The tax, initially slated for implementation in 2026, was projected to generate Rp 7 trillion (approximately $450 million USD) in revenue.
Adhi S. Lukman, Chairman of the Indonesian Food and Beverage Producers Association (Gapmmi), expressed appreciation for the Minister’s decision, stating it demonstrated a comprehensive understanding of the potential economic impact. The move comes as Indonesia navigates a period of moderate economic growth.
“We greatly appreciate the Finance Minister’s comprehensive view, recognizing the potential impact on the economy,” Adhi said during a press conference Monday, December 8, 2025. “It’s now clear, and we are very grateful.”
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Gapmmi continues to support government efforts to reduce non-communicable diseases (NCDs) linked to PSB consumption, focusing on product reformulation, consumer education, and other initiatives. The association believes a collaborative approach is key to addressing public health concerns.
“We are continuously working on these efforts from the business side – whether it’s reformulating products, educating consumers, and various other initiatives we are undertaking. Therefore, a national movement involving the government and the business world to educate the public is necessary,” Adhi explained.
“Consumers need to be aware and control their own diets to maintain their health, avoiding excessive sugar, salt, fat, and so on. However, we strongly believe that taxing PSBs is not the way to reduce NCDs,” he added.
Finance Minister Purbaya Yudhi Sadewa previously stated the decision to postpone the excise was based on the current economic conditions in Indonesia, which he characterized as not yet robust enough to absorb the additional tax burden. He pledged to revisit the issue with the DPR (House of Representatives) if the domestic economy improves and reaches a growth rate of 6%.
“I think the economy isn’t strong enough right now,” Purbaya said during a working meeting with Commission XI of the DPR RI on Monday, December 8, 2025.
“If your prayers are answered and I succeed, we will implement it in the second half [of the year]. Meaning, the economy will grow above 6%,” Purbaya expressed.
The PSB excise had been included in the 2026 state budget, with revenue projections of Rp 7 trillion, intended to both curb sugar consumption for health reasons and boost state revenue.
(ily/hns)
