To rule or not to rule? The policy process of the excise tax on sugar-sweetened beverages in Indonesia

Abstract

PurposeThe rising incidence of non-communicable diseases and sugar-sweetened beverages (SSB) consumption in Indonesia is a concern to the central government. However, the excise tax policy proposal for SSBs, introduced by the Minister of Finance in a 2020 meeting with the Parliament, remains unapproved until 2023. This study analyzes the process and factors influencing stakeholders in managing the implementation of the excise tax policy on SSBs in Indonesia.Design/methodology/approachThis research is based on Kingdon’s Multiple Streams Theory (MST), focusing on the problem, policy and politics streams. It employs a qualitative design and combines a literature review and in-depth interviews in data collection. Interviews were conducted with policymakers, civil servants, senior representatives from nongovernmental health and consumer organizations, trade associations and academics in nutrition, health and taxation.FindingsWe identified that policy entrepreneurs have not succeeded in aligning the policy with the ideology of decision-makers and broader government goals. Therefore, the Parliament has not ratified the SSB excise tax policy until 2023. The effectiveness of interventions is expected to be the primary driver of policy adoption. Despite the complexity of this policy process, we conclude that implementing some reinforcing strategies may be necessary to facilitate policy change. In the Indonesian context, other actors who proactively manage potential criticism from multiple stakeholders are needed. The power of the Coordinating Ministry for Economic Affairs is expected to navigate political complexities and interests among stakeholders. Support for adopting the SSB excise tax policy will likely rise when framing policy alternatives aligns with decision-makers values, involves coordination between ministries, and has a broad public appeal.Originality/valueDespite the constitutional mandate to regulate levies through legislation, there is no research on policy processes in Indonesia, specifically regarding levies and taxes. Examining the Indonesian institutional context in which a policy process takes place may improve the understanding of the many components of MST under unique conditions, providing insights into the specific factors that drive policy change in certain cases.