KUALA LUMPUR, Oct 18 — Malaysians can expect sugar-sweetened drinks like Coca-Cola, Milo and energy drinks like Red Bull to be priced higher January 1, 2025 as the government today announced an increase in their excise duty.

Each litre of sugar-sweetened beverage is set for an increase of 40 sen under this tax, known by its initials SSB.

The announcement was made during the tabling of Budget 2025 at Dewan Rakyat by Prime Minister Datuk Seri Anwar Ibrahim who is also finance minister.

This will apply to all ready-to-drink packaged beverages, like soft drinks and energy drinks that contain more than five grams of sugar per 100ml.

It is unclear if the increased tax will affect freshly prepared drinks served at F&B outlets.

Here’s the TLDR:

  • How much does the additional 40 sen tax affect the prices?

With an additional 40 sen increase on the current SSB tax, the new rate would be:Current tax: RM0.50 per litreAdditional tax: RM0.40 per litre per litreNew tax rate: RM0.50 + RM0.40 = RM0.90 per litre

  • To calculate the tax for a 330ml can of Coca-Cola at this new rate:

New tax per litre: RM0.90Tax for 330ml: 0.33 litre × RM0.90 = RM0.297 (about RM0.30)

  • Why is Putrajaya doing this?

In his speech, Anwar said Malaysia is among the most obese countries in the Southeast Asian region.

“One of the main enemies of non-communicable disease is sugar.

“To support the ‘War against Sugar’ movement, the government plans to gradually increase the excise duty on sugary drinks starting January 1, 2025.”

This is the second time the government has increased the excise duty. The first time was last year for Budget 2024 when the SSB went up by 10 sen.

Health Minister Datuk Seri Dzulfefly Ahmad previously said the tax led to a 9.25 per cent reduction in sugary drink consumption nationwide.

Malaysia introduced a sugar tax in 2019, imposing 40 sen excise duty per litre for ready-to-drink beverages with more than five grams of sugar per 100ml and fruit- or vegetable-based drinks exceeding 12 grams of sugar per 100ml.

According to the National Health Morbidity Survey 2023, about 15.6 per cent of the country’s adult population have diabetes, making Malaysia a country with the highest diabetes rate in the world.

Malaysia is estimated to have a total population of 34.1 million people as of July 2024. Just over half, or 55.4 per cent, of the adult population is either obese or overweight.