- The government, through the Directorate General of Customs and Excise, is currently simplifying the various layers of excise tariffs which apply to the tobacco industry in a bid to reduce the potential for fraudulent activity, to ensure fairness between large companies and small companies, and to simplify the implementation of the current regulatory framework. This simplification process is regulated under Regulation of the Minister of Finance No. 146/PMK.010/2017 on Excise Tariffs for Tobacco Products (“Regulation 146/2017”).
- There have recently been a number of indications that large companies are only paying excise tariffs which are intended for smaller companies. This anomaly is the result of excessive tariff layers for tobacco excise which has led to the creation of an overly complicated system that protects some tobacco companies while discriminating against others.
- The simplification of the current tobacco excise system will commence in 2018 with a reduction to 10 layers, to be followed later during the 2019 to 2021 period by reductions to eight layers, six layers and finally five layers. (ANT)
- For more on Regulation 146/2017, see ILB No. 3242.
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