Starting from January 2023, the prices of some tobacco products and e-cigarettes in Indonesia may increase. This comes after the Indonesian government officially raised the consumption tax on tobacco cigarettes and e-cigarettes or vaping for the next two years (January 2023 to January 2024) for the second time.
Indonesia's Finance Minister, Sri Mulyani, has revealed that there will be different increases in taxes for cigarettes and electronic cigarettes.
In today's decision, the President agreed to increase the cigarette consumption tax by 10% in 2023 and 2024," he said.
At the same time, the increase in the consumption tax of electronic cigarettes reached 15%.
The increase of cigarette consumption tax naturally affects the retail price of cigarettes. So, how much will the retail price of cigarettes be after the tax increase?
Cigarette Retail Price List
The provision to increase the consumption tax on tobacco products is stated in the Ministry of Finance (PMK) Regulation No. 191 of 2022, which pertains to the second amendment of PMK No. 192 of 2021. This includes levying a consumption tax on tobacco products in the form of cigarettes, cigars, tobacco leaves in the form of either cigarettes or Klobot, and tobacco flakes.
The regulation also stipulates the post-price increase for retail cigarettes effective from January 2023.
Mechanism Dianxiang Cigarettes (SKM)
For Group I, the minimum retail price is 2,055 Indonesian rupiahs per piece (equivalent to approximately 0.92 yuan in Chinese currency). For Group II, the minimum retail price is 1,255 Indonesian rupiahs per piece (equivalent to approximately 0.56 yuan in Chinese currency).
2. SPM cigarettes.
For group I, the minimum retail price is 2,165 Indonesian Rupiahs per unit (equivalent to approximately 0.97 yuan Renminbi). For group II, the minimum retail price is 1,295 Indonesian Rupiahs per unit (equivalent to approximately 0.58 yuan Renminbi).
3. The SKT or SPT cigarette brand.
For Group I, the minimum retail price ranges from 1,250 (approximately RMB 0.56) to 1,800 Indonesian rupiahs (approximately RMB 0.81) per unit. For Group II, the minimum retail price is 720 Indonesian rupiahs (approximately RMB 0.32) per unit. For Group III, the minimum retail price is 605 Indonesian rupiahs (approximately RMB 0.27) per unit.
Hand-rolled clove cigarettes (SKTF) or hand-rolled white cigarettes (SPTF) filtered manually.
The minimum retail price is 2,055 Indonesian Rupiah per unit, which is approximately 0.92 yuan in Chinese currency.
Frankincense and rhubarb-flavored cigarettes (KLM)
For Group I, the minimum retail price is 860 Indonesian rupiahs (approximately 0.39 Chinese yuan). For Group II, the minimum retail price is 200 Indonesian rupiahs (approximately 0.09 Chinese yuan).
Tobacco Information System (TIS)
The minimum selling price is 55-180 Indonesian rupiah (approximately 0.02-0.08 yuan in Chinese currency). This price has remained unchanged.
The types of cigarette leaves or Klobot (KLB)
The minimum selling price is 290 Indonesian rupiahs, which is equal to approximately 0.13 Chinese yuan.
Cathode Ray Tube (CRT) in English, is a type of cigar-shaped electronic device that was commonly used in older televisions and computer monitors.
The minimum selling price ranges from 495 to 5,500 Indonesian rupiah (approximately 0.22-2.47 yuan). The prices remain unchanged.
Reasons for the Increase in Cigarette Tax
The price of cigarette excise taxes has been increasing every year. According to Finance Minister Silvia Mulyani, there is good reason to raise these taxes.
He explained that the increase in the cost of cigarette consumption tax from 2023 to 2024 is related to the transformation of the tobacco products industry.
The reason for raising tobacco consumption taxes is also to protect children from the influence of electronic cigarettes.
This is an issue of protecting children as infiltration comes with various flavors (flavor variants)," said Silvia Muliāni.
As the cost of cigarette consumption tax increases, Indonesian Finance Minister Sri Mulyani hopes to control the level of consumption of tobacco products presented in cigarette form, especially among consumers aged 10-18 who are particularly vulnerable.
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