KUALA LUMPUR, Jan 20 — Health Minister Dzulkefly Ahmad said today that revenue from Malaysia’s sugar-sweetened beverages (SSB) excise duty is not ringfenced exclusively for the Ministry of Health (MOH), despite the tax’s public health intent.
Dzulkefly was responding in the Dewan Rakyat’s special chamber session to a question from Ampang MP Rodziah Ismail on the total amount of SSB tax collected since the levy was introduced and whether the MOH was the sole beneficiary.
“The excise duty proceeds for SSB from July 1, 2019, until December 31, 2025, is RM533.88 million,” Dzulkefly said.
“According to Article 97 of the Federal Constitution, all government revenue, including the sugar tax, is placed into the consolidated fund and we are among the ministries that get a little earmarked [sic]… get a little from this collection,” he said.
It’s unclear why Dzulkefly used the word “earmarked” since, as per the Federal Constitution he cited, earmarking of government revenue is unconstitutional.
In practice, this means SSB excise duty revenue is treated the same as other tax collections and does not automatically go directly to MOH, as the Ministry of Finance (MOF) later decides the allocations to dole out to ministries from the federal consolidated fund.
The same principle applies to other “sin taxes”, including excise duty collected on vape liquid that also goes into the consolidated fund and is not earmarked for health.
The SSB excise duty was first imposed on July 1, 2019, at a rate of 40 sen per litre, based on a threshold value for sugar content. From January 1, 2024, the rate was raised to 50 sen per litre, before increasing to 90 sen per litre effective from January 1 last year.
In December last year, Bernama reported Dzulkefly as telling the Dewan Rakyat that MOH received RM21 million from SSB tax revenue to procure SGLT2 inhibitors, a newer class of diabetes medicines, as the ministry expands their use in public facilities.
During today’s special chamber session, Dzulkefly outlined MOH’s strategy for prioritising SGLT2 inhibitors, describing them as medicines recommended for their added benefits beyond glucose control.
“The use of SGLT2 inhibitor has been recommended as a medicine that is different from metformin and other hypoglycemic agents because the SGLT2 inhibitor has certain advantages,” he said. “Among others, it protects the heart, protects the kidney, and slows down end stage renal failure.”
Dzulkefly said the ministry’s first step was to incorporate SGLT2 inhibitors into MOH’s drug formulary to enable wider clinical use.
“What is important for me to mention the strategy is first we list SGLT2 inhibitors in our blue book, the MOH drug formulary, so that it can be used by clinicians. Some examples include dapagliflozin, empagliflozin, and so on,” Dzulkefly said.
He said the medicines were selected based on evidence of cardiovascular and renal benefits, including delaying progression to end-stage kidney failure.
