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Gov't Increases Tobacco Excise  

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30 September 2016 22:46 WIB

TEMPO.CO, Jakarta - The government will increase the rate of tobacco excise in 2017 just as regulated under Finance Minister Regulation No. 147/PMK.010/2016 in an attempt to control cigarette production, labourers, distribution of illegal cigarettes, and tax revenues. The government will also increase cigarette retail price by an average of 12.26 percent.

The new policy stated that the maximum increase of excise will be capped at 13.46 percent for white machine-rolled cigarettes (SPM) and a minimum of zero percent increase for category IIIB hand-rolled cigarettes (SKT), with an average increase of 10.54 percent.

"The government realizes that cigarette is a commodity that is harmful to the people's health condition; therefore consumption [of cigarettes] must be limited. The excise increase is intended to control cigarette consumption and distribution," said Finance Minister Sri Mulyani on Friday, September 30, 2016.

Sri hoped that the increase would have a positive effect on tax revenue for 2017, where the government has set a target of Rp 149.8 trillion of excise revenue, which constitutes 10 percent of the total tax revenue target.

"Altough there is a minor decrease, [excise] contribution to [tax revenue] remains significant. This means the government and the public must guard excise policy because if it misses the target, it will affect the State Budget, which will in turn affect national development," Sri said.

Sri added that the policy had been discussed with respective stakeholders including, health observers, labor observers, tobacco farmers, and cigarette businesses association.

ANTARA



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