- Sri Mulyani, Indonesia’s Minister of Finance, has confirmed that the government has revised several primary excise policies relating to tobacco products, which now include the following: 1) Increase in the average excise tariff for each type of tobacco by 12.5%, which will apply from 1 February 2021; 2) Simplification by reducing the tariff gaps that currently prevail between each tobacco territory; and 3) Adjustment to the tobacco retail price in accordance with the tariff increase.
- Furthermore, Mrs. Mulyani has stressed that the increase in the tobacco excise tariff will be implemented through a consideration of five aspects, specifically: 1) Health, as it relates related to the prevalence of smoking; 2) The labor force working in the tobacco product industry; 3) Tobacco farmers; 4) Sale and distribution of illegal cigarettes; and 5) Revenue.
- In order to ensure that the policy on tobacco excise meets the intended goals, the government has also revised the usage of proceeds from tobacco excise. 50% of said proceeds will now be utilized in order to improve the welfare of tobacco farmers/cigarette workers (through direct financing/BLT, professional training and quality improvements). Meanwhile, the remaining 50% will be divided up equally in order to support the national health security program and the law enforcement program.
- For more information on this story, see Hukumonline: “Tariff Cukai Rokok Naik di 2021, Begini Pokok-Pokok Kebijakannya”.
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