Ada Pertanyaan? Hubungi Kami 
Ada Pertanyaan? Hubungi Kami Fitri Novia Heriani, IGAP Trisnajaya
Recent research by Institute for Economic and Social Research of Faculty of Economics at University of Indonesia (Institute) revealed that the Government’s plan to apply excise on carbonated drinks will not have a positive effect on state revenue and will only lead to an increase of the product price.
The plan, as stated by Bambang Brodjonegoro, Acting Head of Fiscal Policy Agency at the Ministry of Finance, is based on Law No. 39 of 2007 on Excise (Law), which allows the Government to apply the excise in order to increase state revenue and prevent negative impact from excessive consumption of carbonated drinks.
However, Eugenia Mardanugraha, Head Researcher at the Institute, stated in a press conference, Monday (4/2) that “State will suffer losses if the plan is implemented.”
Eugenia explained that carbonated drinks fall under the concept of highly elastic products, which means that if there is even a small price increase, the demand for the product will decrease immediately.
In the calculation of the price increase along with the decrease in demand, the Institute found that imposing an excise on carbonated drinks will cut down the carbonated industry’s revenues up to IDR 5.6 trillion per year, thus resulting in losses for state revenue of up to IDR 783.4 billion per year.
“The decrease in sales may cut down the revenues from [carbonated drinks] producers, consequently state revenue from tax, such as value added tax and corporate tax, will also decrease,” stated Eugenia.
Suroso Natakusumo, Chairman of Association of Food and Beverages Industry, supported the Institute’s findings and stated that the plan will definitely result in decreased demand for carbonated drinks.
Suroso further stated that the plan does not fulfill the criteria for excise application set under the Law.
“[Carbonated drinks] do not meet the criteria as set under the Law, which include products that negatively impact public health and must be supervised,” concluded Suroso.
(jt)
Fitri Novia Heriani, IGAP Trisnajaya
Recent research by Institute for Economic and Social Research of Faculty of Economics at University of Indonesia (Institute) revealed that the Government’s plan to apply excise on carbonated drinks will not have a positive effect on state revenue and will only lead to an increase of the product price.
The plan, as stated by Bambang Brodjonegoro, Acting Head of Fiscal Policy Agency at the Ministry of Finance, is based on Law No. 39 of 2007 on Excise (Law), which allows the Government to apply the excise in order to increase state revenue and prevent negative impact from excessive consumption of carbonated drinks.
However, Eugenia Mardanugraha, Head Researcher at the Institute, stated in a press conference, Monday (4/2) that “State will suffer losses if the plan is implemented.”
Eugenia explained that carbonated drinks fall under the concept of highly elastic products, which means that if there is even a small price increase, the demand for the product will decrease immediately.
In the calculation of the price increase along with the decrease in demand, the Institute found that imposing an excise on carbonated drinks will cut down the carbonated industry’s revenues up to IDR 5.6 trillion per year, thus resulting in losses for state revenue of up to IDR 783.4 billion per year.
“The decrease in sales may cut down the revenues from [carbonated drinks] producers, consequently state revenue from tax, such as value added tax and corporate tax, will also decrease,” stated Eugenia.
Suroso Natakusumo, Chairman of Association of Food and Beverages Industry, supported the Institute’s findings and stated that the plan will definitely result in decreased demand for carbonated drinks.
Suroso further stated that the plan does not fulfill the criteria for excise application set under the Law.
“[Carbonated drinks] do not meet the criteria as set under the Law, which include products that negatively impact public health and must be supervised,” concluded Suroso.
(jt)