New taxes being taxed

The Association of Indonesian Light Cigarette Producers (Gaprindo) has protested to the government about the country’s latest tobacco-product tax increase, according to a story in The Jakarta Post.

From January 1, the government raised the value-added tax (PPN) on cigarettes from 8.7 percent to 9.1 percent.

The increase was a step along the road intended to raise the cigarette PPN to 10 percent, which is the level that applies to other consumer goods.

But Gaprindo has protested that the new measure breaches the government’s agreement with industry players.

Gaprindo’s chairman Muhaimin Moefti was quoted by the business publication Kontan on Friday as saying that, ‘earlier’, both the industry and the government had agreed on a rate of 8.9 percent for this year and 9.1 percent for next year.

The government, in this case, had shown its inconsistency in making its policy.

The group’s members had had no choice but to comply with the rules, though they might have further discussions on the issue, Muhaimin added.

The Post said that a 10.54 percent increase in the average excise tax on cigarettes was also coming into force early this month.