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
Sesh touts independence, 8VC backing and retail reach as it challenges tobacco-owned pouch brands
Sesh touts independence, 8VC backing and retail reach as it challenges tobacco-owned pouch brands
U.S. nicotine pouch brand Sesh has emphasized its independence from Altria, Philip Morris International and British American Tobacco, along with backing from investors including 8VC, celebrity supporters and a retail footprint of more than 7,500 stores, as it seeks to differentiate itself in a market where major pouch brands are owned by large tobacco companies.
Regulations
Jul.07 by 2Firsts Perspectives
Reemtsma says German illegal e-cigarette seizures reached 70% of 2025 total, pouches 179%
Reemtsma says German illegal e-cigarette seizures reached 70% of 2025 total, pouches 179%
Reemtsma said its first-half 2026 black-market tracker for tobacco and nicotine products showed a continued rise in officially reported seizures in Germany, with illegal e-cigarette seizures reaching 70% of the full-year 2025 level and snus and nicotine pouch seizures reaching 179% of last year’s total.
Jul.08
Science | International Experts Propose a New Smoking Cessation Pathway, Citing Higher Quit Rates With E-Cigarettes Than Nicotine Replacement Therapy
Science | International Experts Propose a New Smoking Cessation Pathway, Citing Higher Quit Rates With E-Cigarettes Than Nicotine Replacement Therapy
A new expert paper in JAMA urges U.S. clinicians to include nicotine e-cigarettes in smoking-cessation discussions, citing higher quit rates than nicotine replacement therapy. It also stresses that products must deliver enough nicotine to replace cigarettes, dual use should be brief, and complete switching is the goal. 2Firsts argues the recommendations matter beyond clinics: public-health professionals should reassess relative risk, regulators should preserve sufficient product appeal for adult smokers, and manufacturers should focus on helping users quit cigarettes more sustainably.
SCIENCE
Aug.03 by 2Firsts Perspectives
ATF Cancels Webloc Contract, Raising Questions Over Commercial Location Data in Enforcement
ATF Cancels Webloc Contract, Raising Questions Over Commercial Location Data in Enforcement
The U.S. Bureau of Alcohol, Tobacco, Firearms and Explosives (ATF) has stopped using Webloc, a commercial phone-tracking tool, after lawmakers, a prosecutor and a judge raised legal and privacy concerns over warrantless use of ad-tech location data, a development that may affect data-use boundaries in U.S. enforcement against illicit tobacco, nicotine products and cross-border distribution networks.
Jun.29
From Nicotine Pouches to Soft Candy Forms: China Tobacco Hubei explores adjustable-release oral nicotine products
From Nicotine Pouches to Soft Candy Forms: China Tobacco Hubei explores adjustable-release oral nicotine products
China-based China Tobacco Hubei Industrial Co., Ltd. has filed a patent application covering an oral nicotine product and its preparation method. The patent proposes a soft candy-shaped oral nicotine product containing nicotine ingredients, gelling agents, sweeteners and alkaline pH regulators. Through formulation adjustments and homogeneous or dual-layer structures, the technology aims to achieve different nicotine release profiles. The filing reflects exploration of new oral nicotine product formats and controlled nicotine delivery approaches.
Aug.06