Cigarette Selling Prices Are Officially Up
On January 1, 2020, the government hoists cigarette excise tax rates. This increase in excise is the result of a meeting that President Joko Widodo led at the Presidential Palace, Jakarta, in September 2019.
The government set tobacco tax or cigarette excise rates from 12% to 29%. As a result, the retail sale price (HJE) of cigarettes rose to 35%.
The average increase in excise tax rates for tobacco products is 23%.
Excise rates for machine-made clove cigarettes (SKM) rose 23.29%, machine-made white cigarettes (SPM) rose 29.95%, and hand-rolled clove cigarettes (SKT) or hand-made white cigarettes rose 12.84%.
While tobacco products, such as sliced tobacco, leaf cigarettes, incense softened cigarettes, and cigars did not experience an increase in excise tax rates.
The Minister of Finance Sri Mulyani noted, the realization of excise revenue from tobacco products as of December 5, 2019, reached Rp 143.66 trillion. Cigarette excise is the biggest contributor to customs and excise revenue.
Sri Mulyani added, that the increase in cigarette excise tax was based on three considerations, namely to reduce consumption, regulate its industry, and increase state revenue.
"The number of prevalence of those who smoke cigarettes increases. Both in terms of women especially, and children. The number of children and adolescents rose from 7 percent to 9 percent. Women rose from only 2.5 percent to 4.8 percent," said Sri Mulyani.