TEMPO.CO, Jakarta - East Java Governor Soekarwo has approved the government's plan to increase tobacco excise to 10.54 percent starting from January 1, 2017.
"If [the tobacco excise] increases by nine to 11 percent, I agree," Soekarwo told journalists after the commemoration of the 71st Anniversary of East Java on Wednesday, October 12, 2016.
Soekarwo explained that he was in communications with Finance Ministry's Tax Director General Heru Pambudi. Soekarwo said that he agreed with the tobacco excise increase, because it is aimed to boost the state revenue.
Despite the agreement, Soekarwo explicitly expressed his rejection to the plan to increase cigarette prices to Rp 50,000 (US$3.8).
Earlier, the government announced its plan to increase tobacco excise under the Finance Minister Regulation on the tobacco excise and cigarette prices, in a bid to improve the control over excisable consumer goods, namely tobacco, as well as to boost the state revenue potential generated from the tobacco excise.
The lowest price of cigarette per stick has been set at Rp 655 for machine-rolled kretek cigarette, Rp 585 for machine-rolled white cigarette, Rp 400 for hand-rolled kretek cigarette and hand-rolled white cigarette, and Rp 655 for hand-rolled kretek filter cigarette and hand-rolled white filter cigarette.
In terms of imported tobacco, prices for machine-rolled kretek cigarette and white cigarette are set at Rp 1,120 and Rp 1,030, respectively. Meanwhile, the price for hand-rolled kretek cigarette and white cigarette made of imported tobacco is set at Rp 1,215.
EDWIN FAJERIAL