New tobacco products in Indonesia generate limited tax revenue

Feb.28.2023
New tobacco products in Indonesia generate limited tax revenue
Indonesia's new tobacco products will generate $66.8 million in taxes, accounting for 0.4% of total tax revenue in 2022.

The Indonesian Directorate General of Customs and Excise (DJBC) has stated that the consumption tax revenue from new tobacco products in the country is expected to reach 1.02 trillion Indonesian rupiah (approximately $6.68 million USD) in 2022. This figure amounts to only 0.4% of the total consumption tax revenue for that year.


According to data from the Ministry of Finance, Indonesia is projected to generate tariff and consumption tax revenue of 317.8 trillion Indonesian rupiah (equivalent to $20.8 billion USD) in 2022. The total consumption tax on tobacco products alone is estimated to reach 218.62 trillion Indonesian rupiah (equivalent to $14.3 billion USD).


The consumption tax for the new tobacco products is 1.02 trillion Indonesian rupiah (approximately $66.8 million USD), which is divided into three categories: closed-system electronic cigarettes with a revenue of 119.47 billion Indonesian rupiah (approximately $7.82 million USD), heat-not-burn products with a revenue of 271.93 billion Indonesian rupiah (approximately $17.81 million USD), and open-system products with a revenue of 627.11 billion Indonesian rupiah (approximately $4.1 million USD).


References:


The realization of electronic cigarette tax in 2022 is only Rp 1.02 trillion.


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