Indonesia to Raise Tobacco Tax

The Indonesian government plans to raise tobacco excise rates by 10 percent in 2023 and 2024 for hand-rolled cigarettes, with the maximum increase capped at 5 percent per year, reports Antara.

Excise rates for electric cigarettes of all types will be increased by 15 percent, and other tobacco products will be increased by 6 percent every year for the next five years.

The minimum retail price for tobacco products has been adjusted considering the developments in market prices and the average increase in cigarette excise duty.

The goal of the increase in tax is to decrease smoking and tobacco use among the population.

“With excise as a fiscal instrument to control consumption, we hope that the excise will increase prices, which will then reduce the number of smokers,” said Finance Minister Sri Mulyani Indrawati during a working meeting with Commission XI of the Indonesian House of Representatives in Jakarta.

Indonesia currently ranks first in the world for adult male smoker prevalence and fifth in the world for adult smokers.