Indonesian E-cigarette Industry Opposes Proposed Tax Increase
According to reports from Indonesian media outlet Bisnis, e-cigarette operators in Indonesia are opposing the proposed tax hikes set to be implemented in 2024. Garindra Kartasasmita, the Secretary General of the Indonesian Personal Vaporizer Industry Association (APVI), stated that the industry is already facing pressure from the 15% increase in consumption tax that is set to be enforced in 2023 and 2024.
The taxation on e-cigarettes amounts to nearly 30% when combined with tobacco tax," Galindra stated during a press conference. He argued that this is unfair for an emerging industry composed mainly of small and medium-sized enterprises.
Reference to Decree No. 192/2022 on the tobacco product consumption tax for e-cigarettes and other tobacco processing forms, the consumption tax for solid e-cigarettes (heated tobacco products) in 2023 is set at IDR 2886 per gram, while the consumption tax for open system e-cigarettes is set at IDR 532 per milliliter, and the consumption tax for closed system e-cigarettes is set at IDR 6392 per milliliter.
In 2024, the excise tax for solid e-cigarettes is set at 3,074 Indonesian Rupiah per gram, while the excise tax for open system e-cigarettes is set at 636 Indonesian Rupiah per milliliter. The excise tax for closed system e-cigarettes is set at 6,776 Indonesian Rupiah per milliliter.
Gardner added that there will be a five-year transitional period for taxing traditional cigarettes.
He also criticized the lack of involvement of domestic associations in the process of planning the implementation of e-cigarette taxes in 2024.
We hope that the policy-making process is open and transparent, particularly with the active engagement of influential industries," he urged.
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