Sugar tax implementation poised to reduce medical costs -- MATA

By Azlee Nor Mahmud

KUALA LUMPUR, July 1 (Bernama) -- The implementation of sugar tax in Malaysia which kicked off today will not generate significant revenue for the government but will help in reducing the medical cost arising from the unhealthy habits of consuming excessive sugar, said the Malaysian Association of Tax Accountants (MATA).

President Datuk Abdul Aziz Abu Bakar said the existing excise duty imposed on cigarettes, alcohol and others was meant to avoid health issues among the people.

“The government will not get much revenue from the manufacturers because in any country that introduced soda tax, the manufacturers will change their product mix so that they can produce products that can avoid from having to pay the sugar tax,” he said to Bernama today.

“The people must understand that they (the government) has taken (this) into consideration and the government has given ample time for the business community to adjust themselves and the opportunity for them to plan their strategy in terms of products and production methods.

“The sugar tax has a negative impact…but positive in the perspective of preventive medical cost, meaning we can create a society that takes care of their sugar intake (and health),” he said.

Abdul Aziz said this would mean that Malaysians will have a healthy lifestyle, as individually they would reduce spending on sugar and over the long term, the government would be able to save on hospitalisation cost.

Indirectly, he said, the price of sugar-related products would increase, and manufacturers would not absorb the additional cost due to the tax, and definitely, the cost would be passed on to the retailers and consumers.

On Bursa Malaysia today, Nestle Malaysia Bhd ended as the top loser, declining 70 sen to RM148.40, while Fraser & Neave Holdings Bhd fell 16 sen to RM34.40 and Dutch Lady Milk Industries Bhd edged down 10 sen to RM63.90.

Abdul Aziz said the impact of the sugar tax on the capital market would be for the short to medium term as it is an adjustment period.

“Generally, people will see a drop in sentiment, that's why stock market is a bit down,” he said.

The government must explain this move to the people and ensure that they understood fully that the introduction of the sugar tax would not generate a significant income for the country but is an alternative way to reduce sugar consumption.

-- BERNAMA