Write It Down! This Is Different From The Excise Tariff For Kretek And White Cigarettes

Illustration. (Photo: Unsplash)

JAKARTA - The Ministry of Finance (Kemenkeu) explained the difference in the imposition of excise rates for the Machine Kretek Cigarette (SKM) and Machine White Cigarette (SPM) classes, which mainly lie in local content.

"SPM for the amount of tobacco, both size and weight, mostly uses imports," said the Head of the Excise Sub-Division of the Fiscal Policy Agency at the Ministry of Finance Sarno in the Tobacco Control Support Center webinar of the Association of Public Health Experts in Jakarta, quoted from Antara, Tuesday, February 2.

According to him, with more imported tobacco in SPM, the excise tariff will also be increased.

SPM, he continued, was lower in local content because this group was white cigarettes and did not use cloves.

Meanwhile, SKM, he continued, is a kretek cigarette that uses cloves, using local tobacco products with a larger portion.

The government starting February 1, 2021, will increase the tobacco products excise tariff (CHT) by a weighted average of 12.5 percent.

However, the amount of the increase in excise rates differs by category, namely for SKM I reaching 16.9 percent or Rp125 to Rp865 per stick, SKM II-A increased by 13.8 percent by Rp65 to Rp535 per stick and SKM II-B increased by 15.4 percent. to IDR 525 per stick.

SPM I rose 18.4 percent by Rp. 145 to Rp. 935 per stick, SPM II-A rose 16.5 percent to Rp. 565 per stick and SPM II-B increased by 18.1 percent by Rp. 70 to Rp. 555 per stick.

Meanwhile, hand-rolled kretek cigarettes (SKT) did not increase considering the labor-intensive sector and the period of economic recovery due to the COVID-19 pandemic as well as protecting workers.

The government, he continued, did not simplify the tariff layer in 2021, which is aimed at preventing manufacturers from getting a double blow from the tariff increase and the impact of simplification.

However, the signal of simplification remains with the narrowing of the tariff gap between SKM-IIA and II-B and SPM II-A and II-B.