Indonesia to Retain Tax Rates

Indonesia’s finance ministry confirmed that the country’s tobacco excise rate will remain unchanged for 2025, reports Tempo.

“Pending the finalization of the 2025 State Budget, the government has decided to maintain the current policy,” said Askolani, director general of customs and excise at the finance ministry, during a press conference on Sept. 23.

According to Askolani, the government will continue to explore alternative policy options, including potential price adjustments at the industry level, to discourage smoking. Furthermore, the government will evaluate the price discrepancies between the three main cigarette categories—hand-rolled kreteks, machine-made kreteks and “white cigarettes”—which have contributed to downtrading.

As of Aug. 31, 2024, Indonesia has collected IDR138.4 trillion ($9.1 billion) in excise revenue, representing a year-on-year growth of 5 percent. This increase was fueled in part by increased production of hand-rolled kreteks and machine-made kreteks.