The government is preparing a policy that may change the direction of the packaged food industry in Indonesia: the imposition of excise tax on Processed Sodium Food Products (P2OB). This plan was presented in a working meeting of Commission XI of the House of Representatives, Monday, July 14, 2025.
Deputy Minister of Finance Anggito Abimanyu explained that this policy is part of the steps to expand the state revenue base in 2026.
"The output is policy formulation on the administrative side, recommending goods and excise expansion items," he said.
On the one hand, this is considered a step to reduce public salt consumption, which is still far above WHO recommendations. On the other hand, a big question arises: will this policy be an additional burden for industry, especially UMKM, or will it trigger innovation and reformulation of low-salt products that are still favored by consumers?
High Salt Consumption and the Mounting Health Burden
The problem of excessive salt consumption in Indonesia is not new. Based on the 2018 Riskesdas, the average salt consumption of the Indonesian population reached 10.9 grams per day, more than double the WHO recommendation of only 5 grams.
The consequences are real: non-communicable diseases such as hypertension and stroke continue to be the biggest cause of death and disability. Indonesia's Health Profile 2022 notes that more than 34% of the adult population suffers from hypertension, with the trend still difficult to suppress.
Nutritionist Dr. Tan Shot Yen emphasized that the biggest source of sodium is not the table salt we add, but ultra-processed products such as sauces, soy sauce, instant food, and packaged snacks.
"What we are facing is not only the salty palate of consumers, but also industries that are not always transparent about salt content," said Dr. Tan.
In the digital era, she highlighted a new challenge: influencers who promote high-salt foods without adequate nutrition education.
"The challenge is consumer literacy, as well as influencers who become consumers and promoters of unhealthy products," she said.
He also reminded us that in Indonesia, similar policies often face long obstacles.
"Excise tax on packaged sugar-sweetened beverages (MBDK) alone has been delayed for years. So the most important thing is still education: so that people understand and help drive change," he added.
The government has made it mandatory to label sugar, salt and fat content through Government Regulation No. 28 of 2024. However, labeling alone is not enough. Hence, the idea of a sodium excise tax: making high-salt products more expensive, encouraging manufacturers to reformulate their products to remain competitive.
Successful examples can be seen in the UK: since 2006, through a combination of voluntary reformulation targets and policy pressure, salt content in products has fallen by an average of 15%. In Chile, a "high salt" labeling policy has reduced consumption of high salt foods by 24% (BMJ, 2020).
Product Reformulation: Cost or New Market Investment?
Jaya Darmawan from CELIOS also underlined the potential additional burden, especially for UMKM.
"For micro and small businesses, this can increase production and administrative costs," Jaya said.
He pointed out that in other countries, similar policies are accompanied by nutritional testing labs and warning labels, which ultimately increase costs. "That's why it is better for the government to provide protection, or set a threshold based on production volume, so that certain micro businesses do not need to be subject to excise," he added.
However, the opportunities are also real. According to Market Data Forecast, the global low-sodium food market is expected to grow from USD 1.37 billion (2022) to USD 1.76 billion by 2028.
Mohammad Faisal, an economist from CORE Indonesia, reminds us that excise taxes have two sides.
"Excise is not only to increase revenue, but to control objects that cause negative externalities," he explained. The price increase due to excise is expected to make people more selective. "But does this automatically reduce salt intake? Not necessarily. If people like salty food, they can still cook with lots of salt," said Faisal.
On the other hand, he highlighted the potential negative impact on the industry, especially the processed food sector.
"Don't let the imposition of this excise tax actually suppress the growth of the industry, but not really reduce its health impact," Faisal said.
He also reminded that the function of fiscal policy is not only to maintain budget health, but also economic health and industrial competitiveness. In this regard, Faisal emphasized the importance of research incentives, UMKM assistance, and educational campaigns.
"If it is only excise tariffs without incentives, the industry will be depressed, there could be contraction, layoffs, and eventually public consumption will also fall. This can trigger a downward spiral effect," Faisal explained.
Jaya added, if it is assumed that the sales value of sodium products reaches Rp150 trillion, and around 60% of them are high in sodium, the potential state revenue from excise could reach Rp900 billion per year.
"But it remains to be seen: whether this policy is practical, easy to implement, and does not burden UMKM," Jaya said.
Therefore, the two experts suggested that the sodium excise policy be accompanied by a comprehensive study and incentives for businesses, especially UMKM , so that they can continue to innovate to produce low-salt products that are still popular with consumers.
Between health and revenue goals
From a fiscal point of view, excise on sodium is part of the government's strategy to increase revenue. Anggito Abimanyu said this policy is included in the five main activities of state revenue management in 2026, including services, supervision, and formulation of administrative policies.
The target: raise the ratio of state revenue to GDP to 11.71-12.22%, and the taxation ratio to 10.08-10.45%.
Jaya believes that diversification of excise revenue sources is important, especially since the country has been too dependent on cigarette excise. Therefore, the government is also encouraging excise on sugar-sweetened beverages (MBDK) and excise on sodium.
Above all, fiscal policy should ideally not only maintain the health of the budget, but also the health of the economy.
"If the industry is depressed, there is a risk of contraction, layoffs, and eventually public consumption will also fall," he said.
Healthy Food Industry
Ultimately, the imposition of excise tax on sodium will be a test of the country's policy direction: whether it is just an additional burden, or a trigger for healthier product reformulation and the birth of new markets. To be successful, this policy cannot stand alone. It needs research incentives, reformulation training for UMKM, ease of certification, and public education campaigns.
As Dr. Tan, Faisal, and Jaya conclude, the success of sodium excise will depend on one thing: the government's courage to not only tax, but also create an ecosystem of innovation and education. Otherwise, it will just be an "extra price" on the supermarket shelf. But if managed correctly, it can pave the way to a healthier, more innovative and sustainable processed food industry.