South-east Asia’s largest economy has set the additional tax at 10 per cent of the excise tariff for electronic cigarettes. - PHOTO ILLUSTRATION: PIXABAY via The New Straits Times/ANN
JAKARTA (Reuters/Bloomberg): Indonesia will start imposing a tax on e-cigarettes from Jan 1 on top of the existing excise levy as it steps up efforts to curb vaping, the Finance Ministry said on Dec 30.
South-east Asia’s largest economy has set the additional tax at 10 per cent of the excise tariff for electronic cigarettes, the ministry said in a statement.
“Long-term consumption of electronic cigarettes has been shown to affect people’s health,” it said, adding that the tax on e-cigarettes is also needed to level the playing field with conventional cigarettes.
The new tax comes after Indonesia, which has one of the highest smoking rates in the world, in 2018 imposed a 57 per cent excise tax on essences used for e-cigarettes.
The country has long taxed conventional cigarettes.
A group of e-cigarette producers and customers criticised the lack of discussion and the timing of implementing the tax, considering that excise tariffs for the product will increase in 2024.
The group said it may consider going to court to challenge the tax if the government goes ahead with it.
Vaping in the country surged tenfold in the decade to 2021, while as many as 70.2 million adults consumed cigarettes, according to data from the Indonesian Health Ministry.
The excise on cigarettes will be increased by an average 10 per cent in 2024, while that on e-cigarettes will rise by an average 15 per cent.
Earlier in December, the Indonesian government said it is overhauling its inflation basket and replacing items such as DVDs and print magazines with more commonly purchased goods, including e-cigarettes and vape liquid, to gauge consumer price trends. - Reuters/Bloomberg
