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Malaysia implements “sugar tax” to reduce obesity

Malaysia implements “sugar tax” to reduce obesity

KUALA LUMPUR: Malaysia began implementation of a “sugar tax” on sugar-sweetened beverages from Monday onwards to cut down the country’s high levels of obesity.

In a statement, the Malaysian Customs Department said licensed importers of sweetened beverages were required to produce a letter of undertaking and also submit laboratory reports to ensure the total sugar content of their drinks did not exceed the threshold allowed.

Manufacturers of drinks containing more sugar than allowed and importers who failed to submit reports would be obliged to make payment of the duties involved, it said.

The excise duty is imposed on sweetened beverages at 0.40 ringgit (about 10 U.S. cents) per liter on two categories of ready-to-drink packaged sweetened drinks.

Finance Minister Lim Guan Eng had announced the tax during his national budget speech last year explaining the tax on beverages that contained sugar exceeding five grams per 100 milliliters, and juices that contained more than 12 grams per 100 milliliters.

Deputy Health Minister Dr Lee Boon Chye said on Sunday, the ministry hoped the tax on soft drinks would change people’s consumption of sweet beverages.

“High sugar content contributes to the problem of obesity, diabetes and other chronic non-communicable diseases which is a big problem in Malaysia.

“Malaysia tops the obesity scale in Southeast Asia. We are the gold medalist. We also rank high for diabetes and hypertension. The ministry hopes the people will understand the rationale of introducing this measure,” he said.

The government had touted the tax as part of its efforts to promote a healthy lifestyle, with the tax expected to reduce or discourage the consumption of sugary drinks.

The World Health Organization (WHO) defines obesity as an individual having too much body fat and being overweight as weighing too much. Both terms mean that a person’s weight is greater than that considered healthy for their height.

Malaysia is considered the fattest country in Asia after the country’s 2015 National Health & Morbidity Survey found 30 percent of Malaysians were overweight and 17.7 percent were obese.

Mexico introduced a similar tax in 2014 after 70 percent of the country was found to be overweight or obese, with its sugar tax being credited with a 10 percent drop in the consumption of sugary drinks two years after the tax was implemented.

In response to the announcement, consumer stocks posted a mixed performance on Bursa Malaysia on the first day of implementation of the sugar tax in the country, according to state news agency Bernama.

Global food giant Nestle was the top loser on the local bourse, falling by 0.70 ringgit (16.9 U.S. cents) to RM148.40 (35.90 U.S. dollars) as food conglomerate PPB Group Berhad fell to RM18.60 (4.5 U.S. dollars).

PPB controls 18.5 percent of Singapore-based Wilmar International Ltd, of which the latter’s portfolio includes oil palm plantations and sugar production.

Sugar manufacturer MSM, however, slightly edged up to RM1.42 (34 U.S. cents), while beverage manufacturer Fraser and Neave (F&N) was flat at RM34.56 (8.30 U.S. dollars).