Bertu Merlas, a member of the Indonesian House of Representatives, proposed a classification for the electronic cigarette consumption tax (REL).
Bertu stated that there is a need to categorize the tax on electronic cigarettes sold by REL in order to accommodate small-scale industrial production.
Bertu noted that one should not generalize, as there are many creative industries, especially in the city of Wanlong, that are only family-owned businesses and cannot be compared to large tobacco processing products such as REL or other similar categories like HPTL.
According to Bertu, increasing the consumption tax on domestically produced REL by large companies is the right step to take, considering that these companies import REL from abroad.
However, it is necessary to reconsider the increase of the local producer's REL consumption tax by taking into account the labor absorption factor.
Small industries attract more people, while large companies mainly import cigarettes and equipment. If they expand, we agree that they should only use domestically processed products and also consider the existing creative industries," says Belltu.
According to Bertu, around 200 small-scale REL industries require government protection and support.
For your reference, the REL consumption tax is set to increase by an average of 15% in 2023 and 2024, which differs from the government's original plan to raise the REL consumption tax once over a period of five years until 2027.
The Vice Chairman of the XI Committee, RP RI Dolfie OFP, has stated the need to adjust the policy of increasing consumption tax under REL in order to align with President Joko Widodo's (Jokowi) government term ending in 2024.
Dolfie stated that there will be a requirement for consumption tax on e-cigarettes and HPTL in the next five years. The government's age restrictions will be applied for the first two years. For more information, please refer to the article 'Average increase of 15% in consumption tax on e-cigarettes in 2023 and 2024'.
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