KUALA LUMPUR (July 11): The tax levied on packaged and ready to consume sugary beverages will result in price increases, said Finance Minister Lim Guan Eng.

In a written reply to Datuk Dr Shamsul Anuar Nasarah [BN-Lenggong], Lim said at least 10 sen would be levied on packaged high sugar content drinks with a volume of 250ml, 20 sen on 500ml drinks and 40 sen on 1 litre drinks.

"The excise duty is to be applied to locally manufactured and imported products that are packaged in ready to consume packaging under tariff code 20.09 and 22.02 and have a total sugar content that is more than the indicated threshold," Lim said.

Lim added that the move was done in the interest of public health, particularly when it comes to non-communicable diseases such as obesity and diabetes.

Shamsul then asked in a supplementary question whether the government was aware this would impact the public, as the tax would serve to impact the performance of small to medium enterprises (SMEs), citing media reports.

He also said that while the goods and services tax (GST) was abolished, other taxes have appeared to take its place.

Lim responded by saying that the tax was levied on pre-packaged drinks with a high sugar content, while adding that food and beverage (F&B) companies had voiced their opposition to the move to the Ministry of Finance (MoF).

The ministry had not received negative feedback from F&B operators such as restaurants and stalls, he said, reiterating that packaged beverages with total sugar content below the threshold would not be taxed.

The tax, which was implemented on July 1, is placed on beverages that have more than 5g of sugar or sugar-based sweetener per 100ml at 40 sen a litre.

Carbonated, flavoured and other non-alcoholic beverages are also subject to the tax.

The tax is applied to fruit- and vegetable-based beverages containing more than 12g of sugar per 100ml.