- The Minister of Finance, Sri Mulyani, recently issued Regulation No. 146 of 2017 on Excise Tariffs for Tobacco Products (“Regulation 146/2017”) in a bid to control the consumption of tobacco products, to optimize excise revenues deriving from tobacco products, to improve business compliance and to simplify the excise administration system.
- At present, there are eight categories of cigarette manufacturers and these are based on scale. However, Regulation 146/2017 reduces this number to only five categories of cigarette manufacturer and their respective excise tariffs.
- However, a number of different stakeholders have raised criticisms of the new regulation, arguing that the simplification of excise tariffs for tobacco products is likely to lead to oligopolistic practices and give large tobacco businesses the opportunity to increase their position at the expense of small- and medium-scale tobacco businesses.
- The government is being urged to implement an in-depth review in order to assess the potential impact that the simplification of excise tariffs is likely to have on small businesses and the overall sustainability of the tobacco industry.
- For more on Regulation 146/2017, see ILB No. 3242.
- For more on this story, see Hukumonline: “Kebijakan Simplifikasi Tarif Cukai Rokok Berpotensi Oligopolistik”.
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