U-turn on tax increases
Sampoerna accounted for 7 percent of PMI operating profits and 9 percent of PMI volumes in 2010. More than one out of three PMI employees worldwide work in Indonesia.
The Indonesian government has canceled its plan to increase excise taxes on tobacco and tobacco products in 2019, according to a story in the Jakarta Post.
In addition, the government has postponed its plan to simplify excise tax.
The cancellation and postponement mean that the 2019 cigarette excise tax will remain similar to that of this year.
The government made the decision on Friday during a cabinet meeting attended by President Joko “Jokowi” Widodo.
The National Kretek Preservation Committee (KNPK) was said to have welcomed the government’s move for accommodating the aspirations of stakeholders in the tobacco industry.
“The industry has been under pressure because of increases in the tobacco excise tax over the last few years,” said KNPK co-ordinator Azami Mohammad on Monday, as reported at kontan.co.id.
But the Indonesian Consumers Foundation (YLKI) chairman Tulus Abadi criticized the government’s decision to cancel the cigarette tax hike, saying that Jokowi had no vision on public health.
“This means that the government continues to allow people to be dependent on cigarettes,” he was quoted as saying in a story at tempo.co.
The government had initially planned to increase tobacco excise tax by about 10 percent and to simplify taxes, which are set at different levels for the various categories of cigarettes available on the Indonesian market.