Jakarta: On November 3, 2022, the government announced an increase in the consumption tax on tobacco products (CHT). It is projected that the average increase in traditional cigarette taxes will be 10% over the next two years.
The average growth rate of the REL vaping group has been 15% over the past 5 years. In response to this, the Electronic Cigarette Industry Association is calling for a relaxation of consumption tax on electronic cigarettes.
Appnindo Chairman Teguh Basuki Ari Wibowo said in a written statement on Tuesday, November 22, 2022, "Considering that we are currently in the post-pandemic economic recovery phase, we do indeed need the government's support and protection.
Teguh emphasized that the e-cigarette industry has contributed to the country's economic growth. He explained that the e-cigarette industry not only contributes to the increase in national revenue but also employs between 800,000 to 1 million workers.
However, the issue of consumption tax is not only about raising tariffs. Rizal Taufik, Head of the Macro-Economic and Financial Center at the Institute for Economic and Financial Development (INDEF), stated that the difference in consumption tax for REL products is also a significant issue.
As an innovative product, REL has numerous derivative products with differences in pricing. For instance, this is evident in the open and closed electronic cigarette systems.
Indeed, the variation in consumption tax among different groups is a major issue. Even today, it remains a key topic of discussion," said Lisha.
People believe that the government needs to make efforts to ensure that consumption tax does not vary based on different groups. The government must strictly monitor consumption tax policies, especially with regards to REL.
Lisha stated that the government must also assess tariffs for REL users. Through this assessment, the government can ensure the validity and reliability of the necessary information.
Recently, Professor Fajar Mukti from Universitas Muhammadiyah Yogyakarta shared his views on "The Health Business Competition of Tobacco Product Innovations", highlighting the potential for commercial monopolies due to differences in consumption taxes. He emphasized that consumption taxes for electronic cigarettes are still differentiated by type.
According to regulation 193/PMK.010/2021 from the Ministry of Finance of the Republic of Indonesia, open system electronic cigarettes are subject to a consumption tax of 445 Indonesian Rupiah per milliliter. Meanwhile, the tax rate for closed system electronic cigarettes is 6,030 Indonesian Rupiah per milliliter, which is 13 times higher than that of closed systems.
Mukti stated that this rule is unfair treatment towards businesses and will ultimately harm consumers, as they will have to pay higher fees to enjoy closed-system electronic cigarette products.
Mukti suggests balancing the liquid tax for REL. It is expected that this will encourage competition between open and closed system liquid e-cigarette companies in a healthy way, encourage investment, and absorb labor in Indonesia. As a result, consumers will have a wider variety of alternative products to choose from.
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