The implementation of a new tax on sugary drinks has been a topic of debate for years, but 2026 marks the turning point where policy becomes reality. For business owners in Indonesia’s Food and Beverage (F&B) sector, the inclusion of the sweetened beverage excise (MBDK) in the 2026 State Budget (UU APBN 2026) signals a definitive shift. The government has set a revenue target of IDR 7 trillion, confirming that this is no longer a proposal but a fiscal certainty aimed at curbing diabetes and boosting state income.
However, the transition is fraught with anxiety for manufacturers, importers, and retailers in Indonesia. While the revenue target is fixed, the precise technical mechanisms—such as the exact tariff per liter or specific sugar thresholds—await a final Minister of Finance Regulation (PMK). This ambiguity leaves businesses in a precarious position, needing to forecast margins and pricing strategies without the final numbers. Ignoring this looming cost could devastate profitability, especially for Small and Medium Enterprises (MSMEs) operating on thin margins in Bali.
This guide provides a comprehensive analysis of the legal framework and practical implications of the new sweetened beverage excise. By examining draft tariff scenarios and expected market shifts, we aim to help you prepare your business for the inevitable adjustments in pricing and compliance. Whether you run a beach club in Bali or a bottling plant in Java, understanding the Ministry of Finance (Kemenkeu) roadmap is essential to navigating the financial landscape of 2026 successfully.
Table of Contents
- Legal and Policy Basis: APBN 2026
- Products and Actors Likely Affected
- Indicative Tariff Scenarios and Revenue
- Expected Economic and Health Impacts
- Real Story: The Organic Soda Dilemma in Pererenan
- Practical Implications for Businesses
- Strategic Responses and Risk Management
- Outstanding Uncertainties to Watch
- FAQ's about Sweetened Beverage Excise
Legal and Policy Basis: APBN 2026
The legal foundation for the new levy is solidified in the 2026 State Budget Law (UU APBN 2026). Following agreements between Commission XI of the House of Representatives (DPR) and the government in late 2025, the sweetened beverage excise is explicitly listed as a new revenue stream. This move is framed as a dual-purpose strategy: a fiscal tool to broaden the excise base beyond tobacco and alcohol, and a health intervention to combat the rising tide of non-communicable diseases (NCDs), particularly diabetes, which burdens the national health insurance system (BPJS) across Indonesia.
The policy explicitly targets “Minuman Berpemanis Dalam Kemasan” (MBDK), or packaged sweetened beverage products. Unlike previous years where plans were shelved due to economic instability, the 2026 mandate comes with a hard revenue target of IDR 7 trillion. This figure indicates a robust enforcement plan, signaling to the market that the government expects significant compliance and yield from day one of implementation.
Products and Actors Likely Affected
Understanding the scope of the sweetened beverage exercise is critical for compliance in Indonesia. Policy briefs consistently identify packaged beverages containing added sugar or caloric sweeteners as the primary targets. This includes carbonated soft drinks, flavored sodas, energy drinks, and ready-to-drink (RTD) teas and coffees, which are staples in Indonesian convenience stores. Furthermore, flavored milks, fruit nectars with added sugar, and even concentrates or syrups used in the hospitality sector in Bali are likely to fall under the tax net.
The primary taxpayers will be the manufacturers and importers of these goods. Similar to the alcohol tax mechanism, the excise duty is levied at the production or import stage. However, the economic burden will inevitably cascade down the supply chain. Distributors, retailers, hotels, and cafes in Bali will face higher procurement costs, compelling them to either absorb the hit or pass it on to end-consumers. While drinks with 100% natural fruit juice or no added sugar might be excluded, the specific exemption list remains pending the final PMK issuance.
Indicative Tariff Scenarios and Revenue
While the final regulation is pending, businesses in Indonesia should plan based on public draft proposals. The most discussed model is a volume-based tariff. Concepts circulated by the Directorate General of Customs and Excise (DJBC) suggest a rate of approximately IDR 1,500 per liter for a general sweetened beverage and up to IDR 2,500 per liter for concentrates and syrups. These figures have been used in Kemenkeu simulations for years and represent a probable baseline for 2026.
Alternative proposals have included an ad-valorem system (percentage of price), with suggestions ranging from 2.5% up to a robust 20% as advocated by health groups. A 20% price-effect excise is argued to be the minimum threshold necessary to meaningfully alter consumer behavior regarding sweetened beverage consumption. Given the aggressive IDR 7 trillion revenue target for 2026, it is safer for businesses to assume a tariff structure that leans towards the higher end of these estimates rather than a minimal levy.
Expected Economic and Health Impacts
The introduction of the sweetened beverage excise will inevitably drive up retail prices across Indonesia. Industry analysis forecasts price hikes of up to 30% for certain product segments, particularly low-cost sodas where the excise component constitutes a large fraction of the production cost. This price sensitivity is intentional; health modeling suggests that a 20% increase in price could reduce consumption by roughly 18%, potentially preventing millions of diabetes cases over the next decade.
For the state budget, the MBDK excise provides a necessary buffer. Beyond meeting the IDR 7 trillion target, there is ongoing discourse about earmarking a portion of these funds for health promotion and NCD management. However, industry associations warn of economic headwinds. Manufacturers may face margin compression and reduced demand, which could threaten employment levels and hit the MSME sector—often the producers of affordable, locally-made sweet drinks—the hardest, particularly in regions like Java and Bali.
Real Story: The Organic Soda Dilemma in Pererenan
Meet Sven, a 34-year-old mixologist from Berlin who moved to Bali to launch a premium craft soda brand. In January 2026, Sven opened his micro-brewery in the humid, bustling neighborhood of Pererenan. His “Eco-Fizz” brand utilized organic cane sugar and locally sourced fruits, marketed as a healthier alternative to mass-market sodas. Business was thriving, with distribution deals signed with several beach clubs in Uluwatu.
However, as the news of the new sweetened beverage excise broke, Sven realized his “natural” ingredients did not exempt him from the tax. His production costs were already high, and the proposed IDR 2,500 per liter tax on his concentrates threatened to wipe out his profit margin entirely. He spent sleepless nights listening to the heavy rain on his roof, worrying that he would have to dilute his product or price himself out of the competitive Bali market.
Desperate for clarity, Sven contacted a trusted tax management company to analyze his exposure. They helped him model three different pricing scenarios based on the draft regulations and advised him on how to register as an excise entrepreneur. With their guidance, Sven decided to slightly reformulate two of his best-sellers to fall under a potential lower-tier tax bracket while maintaining his brand’s integrity. “I thought organic meant safe,” Sven admitted, “but the tax office in Indonesia only sees sugar. Being prepared saved my business.”
Practical Implications for Businesses
For producers and importers in Indonesia, the formal designation of MBDK as an excisable good triggers immediate compliance obligations. You will likely need to register as an Pengusaha Barang Kena Cukai (Excise Entrepreneur) with the DJBC. This involves setting up rigorous excise accounting systems to track production volumes, stock levels, and payments. Failure to report accurately can lead to severe administrative sanctions and fines from the Indonesian government.
Downstream businesses, such as restaurants and hotels in Bali, must prepare for cost inflation. The sweetened beverage exercise will raise the Cost of Goods Sold (COGS) for mixers, soft drinks, and syrups. Venue owners will face a strategic choice: raise menu prices and risk lower volume, or reduce portion sizes. Many may shift their inventory mix towards non-sweetened alternatives like sparkling water or zero-sugar options to mitigate the impact on their bottom line.
Strategic Responses and Risk Management
Forward-thinking companies in Indonesia are already engaging in product reformulation. By reducing sugar content below likely taxable thresholds, manufacturers can position their products as “healthier” and fiscally more attractive. Clear labeling and marketing of these low-sugar alternatives will be crucial in maintaining sales volumes as the price gap between taxed and non-taxed products widens in the 2026 market.
Scenario planning is another vital tool. Businesses should simulate their cash flow using multiple excise rates—IDR 1,500, IDR 2,500, and ad-valorem percentages. This stress-testing allows for dynamic pricing strategies that can be deployed the moment the final regulation is published. Waiting for the official PMK to drop before reacting is a strategy for failure; agility is key to surviving the transition in the fast-paced F&B landscape of Bali.
Outstanding Uncertainties to Watch
Despite the confirmed APBN target, significant “Not confirmed” areas remain as of early 2026. The most pressing is the specific tariff structure. Will it be a flat rate per liter, or a tiered system based on sugar grams? The exact effective date within 2026 is also fluid; it could be implemented in Q2 or delayed to Q3 depending on technical readiness of the Indonesian customs system.
Furthermore, exemptions are not yet codified. While policy direction suggests relief for 100% fruit juices or dairy products, no formal exemption list exists. MSME thresholds are also uncertain—will small home producers in Bali be exempt, or will they face the same burden as multinational giants? Until the Minister of Finance signs the PMK, these details remain speculative, requiring businesses to stay vigilant and flexible.
FAQ's about Sweetened Beverage Excise
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When will the sweetened beverage exercise officially start?
The exercise is mandated in the 2026 State Budget, but the exact start date depends on the issuance of the Minister of Finance Regulation (PMK), expected in early to mid-2026.
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Will sugar-free drinks be taxed in Indonesia?
Likely not, or at a lower rate. Policy discussions focus on "added sugar," implying that zero-sugar or low-calorie sweetener drinks may be exempt, but this is not confirmed.
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Who pays the excise tax?
The tax is levied on manufacturers and importers in Indonesia. However, the cost is typically passed down the supply chain to retailers and consumers.
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What is the expected tax rate?
Draft proposals suggest a volume-based rate between IDR 1,500 and IDR 2,500 per liter for a sweetened beverage, though percentage-based models have also been discussed.
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Does this apply to fresh juice sold in Bali cafes?
Generally, the exercise targets "packaged" beverages (MBDK). Freshly prepared drinks served in cups at cafes are typically outside the scope, but packaged production lines are included.
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How will this affect product prices?
Industry experts forecast retail price increases of roughly 20-30%, depending on the final tariff rate and the product's price elasticity in the Indonesian market.
