Demand for Clear Regulations on Tobacco Tax in Indonesia

Dec.11.2022
Demand for Clear Regulations on Tobacco Tax in Indonesia
Indonesia's Kadin urges government to issue regulations on tobacco product consumption tax policy. Increased tax rates cause anxiety among business participants.

On Friday, September 12th, 2022, Adik Dwi Putranto, the Chairman of the East Java Chamber of Commerce in Indonesia (second from the right), participated in a discussion regarding the increase in consumption tax in the city of Surabaya.


Surabaya, Indonesia - The East Java Chamber of Commerce (Kadin) has called on the government, particularly through the Ministry of Finance, to immediately issue a regulation that will standardize the consumption tax policy for tobacco products (CHT).


Adik Dwi Putranto, the chairman of Kadin in East Java, stated in a written statement on Friday in Surabaya that this decision was made in response to the government's announcement in early November 2022 to increase the CHT tax rate by 10% in 2023 and 2024.


There are no clear rules for managing the detailed description of CHT tax rates. This has caused anxiety among business participants as they are unable to plan for purchasing consumption tax stamps in January 2023, which should have been possible as early as December 2022," he said.


Adik stated that the ambiguity of the consumption tax regulations is another issue that enterprise participants must face, along with the burden of increased consumption tax rates.


In fact, he continued, the cigarette consumption tax has increased significantly in recent years, which has become increasingly burdensome for participants in the tobacco products industry (IHT). In addition, there are currently no standard rules regarding tariffs that have been released.


This will undoubtedly disrupt business continuity, especially for companies that no longer have inventory consumption tax stamps, as they must stop operations until an unknown time. "This creates business uncertainty," said Adik.


Adik stated that the continuous distribution of PMK (a tobacco product regulation) is a problem that has significant impacts on the entire tobacco product supply chain. In line with this, the East Java Chamber of Commerce has also expressed its opinion on the government's decision to increase consumption tax for two years.


In line with this, Sulami Bahar, Chairman of the Cigarette Companies Association (Gapero), expressed his hope that the government can better support legitimate business actors in the IHT by implementing clear and transparent regulations.


Sulami states that tobacco companies are facing various pressures such as consumption tax and illegal cigarettes.


According to Sulami, a 10% growth in the next two years is considered to be very high, especially as we need to compete with the illegal cigarette market that is currently circulating.


Sulami expressed concern, stating, "We are worried that if this industry continues to face such pressure, they will close factories or, even worse, turn to illegal cigarettes. In reality, the government has rolled out the red carpet for them.


The owner of PT Surya Hutama Anugerah, Sandee Surya, who also serves in the governance department of the Indonesian Steam Entrepreneur Association (APVI), expressed disappointment with the delay of the PMK decision. The company had already established the plan, but due to the delay, it cannot be implemented immediately.


This is very inconvenient because we already have a plan prepared, but we are not allowed to proceed with P3C recitation yet. It is indeed difficult because slow decision-making has resulted in the concept being put on hold and ultimately postponed," said Sandy.


As such, the e-cigarette industry is hoping for a prompt decision on PMK in order to immediately execute the company's plans. He stated, "We believe that raising prices is already difficult enough, so delaying further is not an option. A decision must be made immediately.


Sandee added that it has been decided to increase the consumer tax for the electronic cigarette industry by 15% in 2023, which saw a growth of 17.5% last year. With this increase, it is bound to become even more significant.


2FIRSTS will continue to track and report on this topic, with further updates available on the "2FIRSTSAPP." Scan the QR code below to download the app.



Disclaimer

This article is provided solely for professional research, industry discussion, and informational purposes. Any references to brands, companies, products, technologies, or policies are made for factual reporting and analytical purposes only, and do not constitute endorsement, recommendation, promotion, or advertising by 2Firsts.

Nicotine-containing products, including but not limited to cigarettes, e-cigarettes, heated tobacco products, and nicotine pouches, carry significant health risks. Readers are responsible for complying with all applicable laws and regulations in their respective jurisdictions, including age restrictions and access limitations.

The information contained in this article should not be regarded as investment, legal, medical, regulatory, or commercial advice. While 2Firsts strives to ensure the accuracy and reliability of its content, it does not assume liability for any direct or indirect loss arising from errors, omissions, inaccuracies, or reliance on the information contained herein.

This article is not intended for individuals below the legal age for accessing tobacco or nicotine-related information in their jurisdiction.

 

Copyright Notice

This article is either original content produced by 2Firsts or content reproduced, translated, summarized, or adapted from third-party sources with attribution where applicable. The intellectual property rights of the original content remain with 2Firsts or the respective original rights holders.

No individual or organization may copy, reproduce, distribute, republish, modify, translate, or otherwise use this content without prior authorization. Any unauthorized use may result in legal action.

For copyright-related inquiries, corrections, or removal requests, please contact: info@2firsts.com.

 

AI-Assisted Translation and Editing Notice

Portions of this article may have been translated, edited, or reviewed with the assistance of artificial intelligence tools to improve efficiency and readability. Due to the limitations of AI-assisted translation and editing, discrepancies, omissions, or inaccuracies may exist when compared with the original source.

Where applicable, readers are advised to refer to the original source for the most complete and accurate information. If you identify any errors or believe that any content infringes upon your rights, please contact us at info@2firsts.com, and we will review and address the matter promptly.

Italy and Greece Oppose Ireland’s Nicotine Product Bill, Raising EU Regulatory Concerns
Italy and Greece Oppose Ireland’s Nicotine Product Bill, Raising EU Regulatory Concerns
Italy and Greece have opposed Ireland’s proposed nicotine product regulations, arguing that the measures could affect EU market coordination and the free movement of products. Ireland plans to introduce stricter rules covering nicotine products including vapes and nicotine pouches, with measures involving packaging, marketing and sales controls. The dispute highlights differences among EU member states between stronger public health protections and maintaining regulatory consistency within the bloc’s single market.
Jul.29
Haypp Report Shows Nicotine Pouches Gaining Ground as a Vape Alternative in the UK
Haypp Report Shows Nicotine Pouches Gaining Ground as a Vape Alternative in the UK
According to Haypp’s 2026 UK Nicotine Report, nicotine pouches are increasingly replacing both cigarettes and vaping. The UK market grew sharply, with Haypp and Northerner reporting a 60% year‑on‑year sales increase in 2025. Notably, 40% of users adopted pouches to quit vaping, nearly matching the 43% who used them to stop smoking. This indicates pouches are expanding beyond traditional smoking cessation and gaining traction among adults seeking non‑inhalable nicotine alternatives.
Jul.01
FDA Tobacco Proposal Signals Full-Chain Compliance Test for Global E-Cigarette Supply Chains
FDA Tobacco Proposal Signals Full-Chain Compliance Test for Global E-Cigarette Supply Chains
FDA’s proposed foreign tobacco establishment registration and product listing rule remains unfinished, but Accorto told 2Firsts it reflects a shift toward structured oversight similar to medical device and pharmaceutical compliance frameworks. For Chinese and global e-cigarette suppliers, U.S. market access is moving beyond product authorization toward full-chain compliance covering manufacturing, documentation, import control, distribution, retail and marketing discipline.
Special Report
Jul.09
Malaysia Police Seize RM12.7 Million in Illegal Vapes and Cigarettes as Probe Points to Sea Shipments From China
Malaysia Police Seize RM12.7 Million in Illegal Vapes and Cigarettes as Probe Points to Sea Shipments From China
Police in Malaysia’s Selangor state seized illegal vape products and contraband cigarettes worth about RM12.7 million (approximately $3 million) in two enforcement operations. According to New Straits Times and The Star, the vape-related operation uncovered 131,036 boxes of vape products, 4,900 bottles of e-liquid and 25,510 vape devices, valued at about RM9.4 million. Police said preliminary investigations indicated that some illegal vape products entered Malaysia through sea shipments from China before moving through storage and distribution networks.
Aug.10
UK Local Council Proposes £5 Refundable Deposit on Vape Devices
UK Local Council Proposes £5 Refundable Deposit on Vape Devices
Norwich City Council is set to debate a proposed vape deposit scheme that would require consumers to pay an extra refundable £5 per device at purchase, with the money returned when the device is handed back, as recent recycling-facility fires, including a major Widnes blaze reportedly very likely caused by a vape, draw greater attention to the risks of improperly discarded lithium-battery devices.
Jul.01
China’s Jinhua Tobacco Launches CNY 2.7 Million Procurement for E-Cigarette Violation Lead Monitoring Services
China’s Jinhua Tobacco Launches CNY 2.7 Million Procurement for E-Cigarette Violation Lead Monitoring Services
Jinhua Tobacco, a municipal tobacco company in China’s Zhejiang province, has launched a public tender for e-cigarette-related violation lead monitoring and consulting services. The project is valued at CNY 2.7 million and covers data resource integration and analytical consulting services for 36 months from contract signing. The procurement reflects the use of external data and analysis services to support local tobacco companies’ market oversight activities related to e-cigarettes.
Aug.07