A sugar tax makes sense – a soda tax doesn’t

By Hafidz Baharom

I was intrigued by the suggestion of Tony Pua to tax sodas, even if his line of reasoning that the “Bottom 40” income group “do not need to drink Coke”. If we want to go into technicalities, nobody really needs to drink Coke regardless of their income levels. It is pretty much a want, humanity needs only water.

Although to be fair, Tony was alluding to a good policy. Former New York Mayor Michael Bloomberg had wanted to end selling sodas to a certain gigantic size which got blowback as a “War on the Big Gulp”.

Also, let me be frank – sugar in moderation is fine, it is just that we have been excessive consumers of sugar for far too long.

At the same time, why tax sodas when you can tax sugar, right after removing the price controls on the commodity? On a side note, petrol is subsidised, but talk to anyone in the sugar industry and they will say it is not a subsidy, but a controlled price. I know – it’s still a subsidy.

A sugar tax makes more sense than a proposed soda tax, especially when a lot of canned retail beverages hide their sugar content behind labels such as “energy drinks”, juices, even milk and cordials.

Also, let’s be frank, sugar is sugar, all sugar is natural in all forms, and just because you hide behind terms of sucrose, fructose and glucose doesn’t make sugar healthier. Thus, a proposed tax should definitely be worded to include all of these.

But before we go any further – what exactly is the objective of this tax? While it is directly to increase government revenue, are we actually aiming to promote healthier lifestyles for Malaysians by encouraging them to cut down their sugar intake?

If it is to encourage a healthier population, then we do need clarify how excessive sugar impacts government expenditure – particularly in the case of healthcare. Go far enough, and you can link sugar to obesity and subsequently how it impacts the maintenance of government owned assets from cars to elevators.

However, if it is just to “stop the B40 from drinking Coke”, it sounds rather discriminatory.

At the same time, a sugar tax would also attach itself on foods and restaurants which also have high sugar content as well, which would move towards healthier eating. But more importantly, it will move the industry to innovate towards sugar substitutes – it could be natural like stevia and honey, or more chemical compounds such as aspartame.

Some have pointed out that a sugar tax will not change the lifestyles of people who will still want an original soda rather than those with no sugar or a sugar substitute – I disagree. If a sugar tax is high enough to the point that those dishing out soft drinks the most (read: fast food operators) decide to switch to the non-sugar counterparts, it will have an impact even if it is a minuscule one.

However, we should be cautious introducing a sugar tax, particularly because it will impact small and micro traders – the food and beverage stalls at food courts, and even the mamak restaurants will be the worst impacted by this move which will subsequently domino down to consumers directly.

But such is the price for a healthier Malaysia.

That being said, we should really move away from sugar and try the alternative sweetened sodas, as well as trying to use these alternatives in our foods. But at the same time, these alternatives must obviously be cheaper, or the public will revolt.

If this is how the government wishes to proceed to make up for the shortfall from the recently abolished Goods and Services Tax (GST), then more power to them. However, won’t such a tax also be regressive, their own argument against the GST before?

I would think the worst impacted by the introduction of a sugar tax will be the same group that were against the GST, which is the middle class. Thus, perhaps it is something to ask them before the government proceed.

For myself, I don’t mind if the government decides to move towards a healthier lifestyle through nudging the public with taxes – they’ve done it with alcohol and cigarettes for ages. But at the same time, I believe in offering alternatives which are less harmful. If a sugar tax were introduced, then there should be a push towards sugar free products and artificially sweetened products as well.

No, using fruit juices as a sweetener should not be exempt, as it is still sugar. And then, of course, there are “health nudges” that I’m sure we are not ready for.

A friend pointed out that rice was actually worse than sugar – based on an advertorial video on Malaysiakini. But I have yet to go too far off the bend to tell a predominantly Asian food culture country to cut down on rice, just like I won’t go to Italy and tell them to dump pasta.

Maybe in another decade or so.

One thought on “A sugar tax makes sense – a soda tax doesn’t

  1. If Tony Pua was really concerned about health of the lower income group, then mandate a limit to sugar in sodas coupled with a public education programme to inform people about the dangers of consuming excessive amounts of sugar.


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s