PETALING JAYA: Budget 2025 is anticipated to be a “healthy” one with the sugar tax likely to be expanded to cover unhealthy food choices too, say tax and health experts.

KPMG senior adviser on tax policy Dr Veerinderjeet Singh said with the sugar tax introduced previously, a further tax increase on sugary stuff appeared imminent.

“The sugar tax is already there but it only covers a certain scope such as sugary drinks, which are subject to the tax,” he said, adding that more unhealthy food items were expected to be taxed.

He said he supported the move to create a healthier society, although he warned about inflationary effects on certain goods.

On the anticipated implementation of the High Value Goods Tax (HVGT), Veerinderjeet said it was already announced under the previous federal budget.

“The challenge is on the scope of the tax and how to define high-value goods.

“Since the announcement last year, there has been a number of engagements with the Finance Ministry which brought the HVGT back to the drawing board,” he said.

In 2019, the government introduced a tax on sugary drinks, imposing a 40 sen per litre levy for beverages containing more than 5 g of sugar per 100 ml and fruit juices with 12 g of sugar per 100 ml.

Under Budget 2024, Prime Minister Datuk Seri Anwar Ibrahim announced that the levy was to be increased by 10 sen to 50 sen per litre under the sugar-sweetened beverages tax (SSB).

On Sept 10, Health Minister Datuk Seri Dr Dzulkefly Ahmad said a further hike would be announced under Budget 2025.

He said this followed the success in reducing sugar consumption among Malaysians by 9.25 per cent nationwide after a 10sen increase under the SSB in Budget 2024.

Anwar has reminded the people to adopt a healthier lifestyle, particularly with regard to the dangers of excessive sugar consumption in light of the fact that Malaysia has the highest number of diabetes cases in Southeast Asia.

On the other hand, the HVGT was announced under Budget 2024 and was to have been implemented on May 1 this year, but it was delayed following pushback from several business groups.

The new tax, of between 5 per cent and 10 per cent, was to have been applied to items such as jewellery, watches and cars that exceeded a certain price threshold.

Associated Chinese Chambers of Commerce and Industry of Malaysia (ACCCIM) treasurer-general Datuk Koong Lin Loong backed the move to increase the sugar tax.

“It is good as long as the definition is precise as to what constitutes healthier food,” he said.

Apart from sugar content, he said foods with high fat or calorie content should also be subject to some form of levy.

“At the end of the day, it is a matter of personal choice whether a person is willing to pay higher for certain food items,” he said, adding that the revenue generated from such taxes could be channelled towards creating a healthier lifestyle among Malaysians.

Malaysia Retailers Association president Datuk Andrew Lim also backed a hike in the sugar tax, including on other food items, to promote healthy living.

“This is a social purpose towards addressing health issues in Malaysia. We are all for it,” he said.