Indonesia to raise tobacco tax, 15/10/10

INDONESIA, with one of the highest smoking rates in the world, plans to raise its tobacco excise tax by five per cent next year to help meet state revenue targets, a senior official said on Wednesday.

Cigarettes sell for about a dollar (US) a packet in Indonesia, where 60 per cent of men are estimated to smoke along with ‘disturbing’ number of children, according to the Asia Pacific Association for the Control of Tobacco (APACT).


Finance ministry official Agus Supriyanto told Dow Jones Newswires the excise level was likely to rise five percent on average next year in what is the world’s fifth-largest tobacco market.

Customs chief Thomas Sugijata said the increase would help meet the country’s excise revenue target of 60.7 trillion rupiah (S$8.9 billion) – up four trillion rupiah.

But he said the final excise rate had still to be decided and was subject to discussion with the industry, which employs millions of people in the archipelago. ‘We’re still discussing the rate increase and will ask for inputs from industry, but we can promise that the increase will be moderate,’ Mr Sugijata said.

For 2010 the government aimed to reduce cigarette production to 240 billion sticks from 245 billion last year. The current excise level per cigarette ranges from 65 to 320 rupiah.


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