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Ministry Imposes 9.1 percent VAT for Tobacco Products
Monday, 09 January, 2017 | 16:54 WIB
Ministry Imposes 9.1 percent VAT for Tobacco Products

TEMPO.CO, Jakarta - Finance Minister Sri Mulyani Indrawati has set a 9.1 percent of Value Added Ta (VAT) for tobacco products for 2017. The percentage was higher compared to the number set in 2016 of 8.7 percent, and 8.4 percent in 2015.

According to information quoted from the Finance Ministry website on Monday, January 9, 2017, the new tariff is stipulated in Finance Minister Regulation No. 207/2016 on Guideline for Calculating and Collecting Value Added Tax for Tobacco Products.

Tobacco products subject to the Regulation include cigarettes, cigars, chopped tobacco, and other tobacco products. According to the Regulation, the VAT is calculated based on effective tariffs multiplied by other values. The Regulation has entered into force on January 1, 2017.

Suahasil Nazara, Chief of Fiscal Policies of the Finance Ministry, said that the government plans to normalize tobacco products VAT to 10 percent through several stages.

However, Suahasil was reluctant to provide detailed explanation on when the 10 percent VAT will be imposed. "Currently, [the VAT] is 9.1 percent, and it is final. [...] It will be returned to normal [in 2019]," Suahasil explained.


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