JAKARTA - The Ministry of Finance (Kemenkeu) has issued Minister of Finance Regulation (PMK) Number 143/PMK/2023 concerning Procedures for Levy, Cutting, and Depositing Cigarette Taxes.
As for the regulation, the e-cigarette tax is set at 10 percent of cigarette excise. The amount of this tariff is the same as the tariff stipulated in the previous provisions, namely PMK 115/2013.
The Cigarette tax referred to in this PMK includes an e-cigarette tax. This is in accordance with the mandate of Law Number 1 of 2022 concerning Financial Relations between the Central Government and Regional Governments (UU HKPD).
Head of the Ministry of Finance's Communication and Information Service Bureau, Deni Surjantoro, conveyed the purpose of issuing this PMK as an effort to control cigarette consumption by the public. For this reason, the role of stakeholders, including e-cigarette business actors, in supporting the implementation of this policy, is very important.
"The implementation of the Cigarette Tax on Electric Cigarettes (REL) on January 1, 2024 is a form of the Central Government's commitment to providing a transition period for collecting cigarette taxes on e-cigarettes since the imposition of excise in mid-2018," he explained in his official statement, quoted on Sunday, December 31.
For information, e-cigarettes are one of the excisable goods as mandated in Law Number 7 of 2021 concerning Harmonization of Tax Regulations which regulates that excise duty is imposed on excisable goods, one of which is tobacco products, which include cigarettes, cigars, leaf cigarettes, cut tobacco, e-cigarettes, and other tobacco processing products (HPTL).
The imposition of cigarette excise on e-cigarettes will also be subject to the imposition of cigarette taxes which are levies on cigarette excise (piggyback taxes). However, at the time of the imposition of excise on e-cigarettes in 2018, the Cigarette tax had not yet been imposed.
This is an effort to provide sufficient transition period for the implementation of the concept of piggyback taxes which has been implemented since 2014 which is the mandate of Law Number 28 of 2009.
Deni explained that in principle, the imposition of the e-cigarette tax prioritizes the aspect of justice, considering that conventional cigarettes in their operations involve tobacco farmers and factory workers, who have been subject to cigarette taxes since 2014, in addition to state revenues.
According to Deni, in the long term the use of e-cigarettes is indicated to affect the health and ingredients contained in e-cigarettes, including in consumer goods that need to be controlled.
The revenue of e-cigarette excise in 2023 is only IDR 1.75 trillion or only 1 percent of the total acceptance of Tobacco Products Excise (CHT) in a year.
Deni said the policy of imposing an e-cigarette tax is also a joint contribution between the government and stakeholders, especially electric cigarette businesses, which are expected to be optimally beneficial to the community.
"At least 50 percent of this cigarette tax revenue is regulated for the use (earmarked) for public health services (Jamkesnas) and law enforcement which ultimately supports better public services in the regions," he concluded.
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