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Excise Duty on Sugar Sweetened Beverages

Excise Duty on Sugar Sweetened Beverages (“SSB”) as announced in the National Budget 2019 is proposed to take effect on 1 April 2019, in less than a month’s time.  A smooth implementation would entail clear and precise legislations to ensure that businesses are given sufficient time and clarity to comply, not only from the perspective of law but with minimal adverse impact to business.

Pending news about this new tax, businesses could only work with assumptions.  Amidst a number of uncertainties, we envisage that the areas set out below would need to be addressed (not exhaustive):-

  • Pricing – Would the Government expect to see a price hike to discourage consumption? If yes, the requirements of Price Control and Anti Profiteering provisions would be relevant.  Would existing transfer price need revision next (where related party transactions are involved)?
  • Product classification – Same tariff line applies to products that are excisable and non-excisable: Would separate invoicing be required? To determine which product attracts Excise Duty, would labelling be sufficient or additional evidence (e.g. lab analysis) be required?
  • Goods returned – Would there be avenues for manufacturers to claim Excise Duty refund, as there is lack of such provision in the current regime of Excise Duty?
  • Cash Flow – Are businesses ready to cope with upfront payment of Excise Duty prior to removal of goods for sale, when payment from customers will only be received much later?
  • Segregation of operation – Is it practicable or feasible to expect business to segregate existing operations into excisable and non-excisable goods as per the current excise law requirements?
  • Changes to systems and documentations – What type of changes are needed e.g. separate recording lines for excisable and non-excisable goods and can all these changes be accomplished in time?
  • Security / bank guarantee – Will the existing requirement that is applicable to alcoholic beverages and tobacco products also apply to SSB manufacturers?

The affected businesses and Government should work together to address these implications and ensure that clarities are communicated in a timely and effective manner so that the implementation of Excise Duty on SSB could be accomplished seamlessly. 

The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation.

Contact KPMG

For more information on our core service offerings, please contact:

Petaling Jaya Office

Tai Lai Kok
Executive Director –
Head of Tax and Head of Corporate Tax
+ 603 7721 7020

Long Yen Ping
Executive Director –
Head of Global Mobility Services
+ 603 7721 7018

Bob Kee
Executive Director –
Head of Transfer Pricing
+ 603 7721 7029

Ng Sue Lynn
Executive Director –
Head of Indirect Tax
+ 603 7721 7271

Soh Lian Seng
Executive Director –
Head of Tax Risk Management
+ 603 7721 7019

Nicholas Crist
Executive Director –
Corporate Tax
+ 603 7721 7022

Dato’ Leanne Koh
Executive Director – 
Corporate Tax
+ 603 7721 7026

Neoh Beng Guan
Executive Director – 
Corporate Tax
+ 603 7721 7025

Ong Guan Heng
Executive Director – 
Corporate Tax
+ 603 7721 7027

Chang Mei Seen
Executive Director – 
Transfer Pricing
+ 603 7721 7028

Ivan Goh
Executive Director – 
Transfer Pricing
+ 603 7721 7012




Evelyn Lee 
Executive Director –
Penang Tax
+604 238 2288 (ext. 312)

Regina Lau
Executive Director –
Kuching & Miri Tax
+6082 268 308 (ext. 2188)

Titus Tseu
Executive Director –
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+6088 363 020 (ext. 2822)

Ng Fie Lih
Executive Director –
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+607 266 2213 (ext. 2514)

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+605 253 1188 (ext. 320)