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.

KT&G Q1 2026 Financial Results: Revenue at $1.156 Billion, E-Cigarettes to Launch Independent Overseas Expansion
KT&G Q1 2026 Financial Results: Revenue at $1.156 Billion, E-Cigarettes to Launch Independent Overseas Expansion
KT&G reports a 27.6% increase in Q1 operating profit, with traditional and new tobacco sectors driving growth.
May.07 by 2FIRSTS.ai
German Environment Minister Plans Bill to Ban Disposable E-Cigarettes This Year
German Environment Minister Plans Bill to Ban Disposable E-Cigarettes This Year
German Federal Environment Minister Carsten Schneider said he is preparing legislation to ban disposable e-cigarettes and will present a bill this year. Industry data estimated that legal e-cigarette sales in Germany rose by about one quarter in 2025 to €2.4 billion. Refillable devices are not expected to be affected by the ban.
May.09 by 2FIRSTS.ai
Imperial Brands Explains What the UK Tobacco and Vapes Act 2026 Means for Retailers
Imperial Brands Explains What the UK Tobacco and Vapes Act 2026 Means for Retailers
Imperial Brands has outlined what the newly approved UK Tobacco and Vapes Act 2026 means for retailers. The legislation received Royal Assent on April 29, 2026, and gives the Government powers to extend tobacco-style regulation to a wider range of products, including vaping products, heated tobacco, nicotine pouches and cigarette papers. Imperial Brands emphasized that most measures will be introduced in phases rather than taking effect immediately.
May.11 by 2FIRSTS.ai
PML Expands Its UK Smoke-Free Portfolio With LEVIA
PML Expands Its UK Smoke-Free Portfolio With LEVIA
Philip Morris Limited has launched LEVIA, a new range of zero-tobacco flavored nicotine sticks created for the IQOS ILUMA range. The product expands the company’s smoke-free portfolio in the UK and will initially be available in four variants, including Deep Mint and three capsule-based flavors. LEVIA has a recommended retail price of £5, or about $6.73, based on the European Central Bank’s April 28.
Apr.29 by 2FIRSTS.ai
Ispire and Jincheng Pharma Form Joint Venture to Enter Global High-Growth Nicotine Pouch Market
Ispire and Jincheng Pharma Form Joint Venture to Enter Global High-Growth Nicotine Pouch Market
Summary Ispire Technology announced a strategic joint venture with Chinese pharmaceutical company Jincheng Pharma to manufacture and commercialize nicotine pouch products. The partnership combines pharmaceutical-grade production capabilities with Ispire’s global regulatory infrastructure and distribution network as the company expands beyond vaping hardware into oral nicotine products.
Business
May.13
FDA Commissioner Marty Makary Resigns After Opposing Trump Administration’s Flavored Vape Push
FDA Commissioner Marty Makary Resigns After Opposing Trump Administration’s Flavored Vape Push
FDA Commissioner Marty Makary resigned on May 12 after opposing the Trump administration’s push to authorize fruit-flavored vaping products, according to reporting by The New York Times. Makary reportedly objected over concerns that flavored vapes could attract young people and refused to support broader approvals.
News
May.13