A Planned $100 Million Sweetened Beverage Tax Ignites Deficit Alarms

JAKARTA, Investortrust.id — Indonesia’s fiscal authorities are reviving plans to levy a controversial excise tax on packaged sugar-sweetened beverages (MBDK) in the 2027 draft state budget (RAPBN), penciling in a conservative revenue target of Rp 1.6 trillion ($100.63 million) amid mounting pushback from lawmakers over fiscal discipline.

The proposed levy represents a sharp downshift from an earlier ambitious Rp 7.6 trillion ($477.99 million) target baked into the 2026 state budget that was ultimately shelved. If enacted alongside existing duties on tobacco derivatives, alcohol, and ethyl ethanol, the measure is designed to lift the government's total customs and excise tax receipts to Rp 235.26 trillion ($14.80 billion) in 2027.

The introduction of an excise duty on packaged drinks carries significant consequences for Southeast Asia’s consumer staples giants, multinational bottlers, and local food processors who have operated without sugar-related levies for years. Beyond consumer product margins and pricing power, global bondholders and rating agencies are tracking the measure closely, scrutinizing whether Jakarta can realistically hit non-commodity tax targets without generating revenue shortfalls that expand sovereign borrowing requirements.

Regulatory Hurdles and Ministerial Hesitation

Fiscal planners acknowledge that rolling out the tax remains bogged down in administrative coordination and technical benchmarking. The Directorate General of Customs and Excise must coordinate complex compliance parameters governing statutory thresholds for salt, sugar, and saturated fat consumption.

"For next year, the projected target stands at roughly Rp 1.6 trillion," said Ferry Ardiyanto, Acting Director General of Economic and Fiscal Strategy at the Ministry of Finance, during a parliamentary hearing cited on Friday. "Together with our enforcement arm, the Directorate General of Customs and Excise, we will evaluate and explore the operational roadmap for levying the sweetened beverage excise."

Ardiyanto clarified that executing the statutory duty remains subject to broader inter-ministerial consensus and final marching orders from Finance Minister Purbaya Yudhi Sadewa. The ministry has proceeded with caution to avoid disrupting consumer purchasing power amid uneven economic tailwinds.

Parliament Slams Repeated Revenue Phantom Targets

Lawmakers on House Commission XI—the parliamentary body overseeing state finance and banking—voiced sharp skepticism over the renewed target, pointing to the unfulfilled tax projections in previous budgets. Lawmakers raised concerns that embedding unpassed excise plans into formal state balance sheets creates an artificial buffer that directly increases fiscal deficits once operational plans stall.

"If the tax was budgeted in 2026 but never actually collected, our actual state receipts declined," said Dolfie Othniel FP, Deputy Chairman of House Commission XI, during deliberations with finance officials. "Now it is being budgeted again for 2027. If this is not enforced, where will the shortfall be covered?"

The rebuke follows repeated calls by parliament since late 2025 demanding that the executive branch stop relying on aspirational excise categories before statutory regulations are signed. Lawmakers warned that retaining paper revenue assumptions without legal backing leaves spending programs exposed and risks blowing out statutory deficit caps.