A health think tank has praised a tax on soft drinks but they have warned the government that consumer can switch sweeter beverages such as teh tarik which doesn’t fall under the category of sugar tax. The Galen Centre for Health and Social Policy stated that the non-alcoholic vegetable and fruit drink is going to be taxed 40 sen every liter starting from April where only a small portion of these unhealthy drink and food.
Azrul Mohd Khalib, the Galen Chief Executive said that the consumers will either switch or increase their preference to familiar alternatives like sirap bandung, teh tarik, milo, three-layered tea, and kopi susu. The list is quite long and is more problematic than soda drink in comparison since they are consumed by most of the consumers. The beverages are going to escape taxation.
He said that the excise on the sugar-sweetened beverages have been long overdue. However, he has cautioned the government that studies have shown some mixed efficaciousness of the tax for reducing obesity.
Studies from Chile, United Kingdom, and Mexico that have implemented the measure have shown that young consumers who are price sensitive will reduce their sugar consumption by almost 80% in a short term. However, old people who already have high sugar diets for many years are unlikely to change and will be insensitive to price increase. In long term, the consumer will be desensitized to this price difference needing additional tax increase in future.
Galen has also requested the government to apply for the sugar tax to the manufacturers rather of at the point of retails such as United Kingdom for incentivize manufacturers for the reducing the sugar content and also for avoiding tax. The sugar tax revenue which is collected need to be earmarked and can go towards the funding of health programs that has been designed for dealing with non-communicable diseases, particularly cancer and diabetes. The Galen Centre for Health and Social Policy