Concerns as Indonesia looks to increase revenue

Indonesia’s cigarette manufacturers are concerned that the government aims this year to raise tobacco excise a second time, according to a story in The Jakarta Post.

In its revised 2015 budget, the government has indicated that it aims to take Rp145.7 trillion (US$11.2 billion) this year in excise tax, 20.9 percent higher than its initial target of about Rp120.5 trillion.

The government raised tobacco excise by an average of 8.7 percent from January 1, and concerns have emerged among industry players that tobacco excise will be raised again to meet the higher revenue target.

Based on data from the Indonesian Cigarette Producers Association, the number of cigarette factories in the country has declined from as many as 4,900 in 2009 to around 600 at present, with many unable to survive the excise hikes and fierce competition.