Smokers to pay for revenue shortfall

A below-expected cigarette production level during the first half of this year was partly responsible for Indonesia’s revenue falling below target, according to an en.tempo.co story.

During a House of Representatives Budget Committee meeting on Wednesday night, Agung Kuswandono, director general of Customs and Excise, said two factors had conspired to reduce the targeted revenue. The first was a ban on raw mineral exports since the enactment of the Mineral and Coal Law.

The second was down to the lower-than-expected cigarette production level that had caused cigarette tax revenues to fall below target. Customs and Excise had initially predicted cigarette production would reach 358 billion by the middle of the year.

However, production reached only 353 billion. “In terms of health, reduction in cigarette production is a good thing,” Agung told the Committee. “However, in terms of excise revenue, it certainly has a different meaning.” The upshot of the revenue shortfall is likely to fall on to the shoulders of smokers.

Agung said that his department had delivered a plan to the Budgeting Board of the House of Representatives for an increase in tobacco excise amounting to 10.2 percent.