The potential impact of taxing sugar drinks on health inequality in Indonesia

Abstract

BackgroundEvidence suggests reducing consumption of sugar-sweetened beverages is important to reducing weight gain and chronic disease risk. Indonesia’s large population is a growing market for sugar-sweetened beverages. Taxation to reduce consumption is of interest, but considered fiscally regressive. Little is known about differential effects between income groups in low-income countries.MethodsThis modelling study uses a proportional multistate life table to model reduced daily energy intake following a $0.30 per litre tax on sugar-sweetened beverages and subsequent shifts in Body Mass Index (BMI) distribution for income groups in Indonesia. Energy balance equations calculate reduced BMI. Reduced incidence of type 2 diabetes mellitus, ischaemic heart disease and stroke is determined from the relative risk of the BMI shift and subsequent health-adjusted life years gained calculated.ResultsThe tax’s effect was greater for higher income quintiles than lower. Energy intake reduced most in higher income quintiles. Cases of overweight and obesity for women decreased by approximately 15 000 in the lowest income quintile, but 417 000 for the highest. For men, this was 12 000 and 415 000. Over 25 years, 63 000 cases of diabetes were averted in the lowest quintile and 1 487 000 in the highest. Similar magnitudes were observed for stroke and ischaemic heart disease. Tax paid over 25 years was $0.5 billion for the lowest income quintile and $15.1 billion for the highest.ConclusionSugar-sweetened beverage taxation can help to reduce the number of overweight and obese, and prevent over a million cases of diabetes in Indonesia. Higher income groups would benefit more than lower income groups. The tax would raise $920 million in the first year and $27.3 billion over 25 years.