Cigarette Excise Tariffs Rise, Here Are 4 Considerations Of The Ministry Of Finance

Cigarette excise (photo; intermediate)

JAKARTA - Director General of Customs and Excise (DJBC) Askolani ensured that the policy of adjusting excise rates for tobacco products and e-cigarette excise was to control consumption by taking into account the condition of the tobacco industry and farmers.

"The policy of adjusting tobacco excise rates and excise duty on e-cigarettes is based on 4 main aspects," he explained to VOI, Thursday, January 4.

According to Asko, the 4 aspects include the first aspect, namely health to reduce the prevalence of smokers, both for adults and children, the second is to consider industry, labor, farmers and the agricultural sector, third for supervision of illegal cigarettes, the latest receipts obtained.

Askolani added that acceptance is a consequence of the cigarette tariff adjustment policy which is calculated in the state budget.

According to Asko, some of the excise revenues from these tobacco products will be allocated for the distribution of tobacco excise proceeds to the relevant local government for use in the protection program for tobacco farmers, assistance and construction of health facilities for the community.

For information, the government has set provisions governing the increase in CHT rates for cigarettes and the minimum Retail Selling Price (HJE) through PMK 191/2022.

Through this regulation, the government regulates cigarette excise rates with an average increase of 10 percent as of January 1, 2024. Meanwhile, specifically for Hand Kretek Cigarettes (SKT), the maximum increase in excise rates is 5 percent as a form of partiality to sectors that absorb a lot of labor.