30-12-2023 (JAKARTA) In a move aimed at curbing vaping and addressing public health concerns, Indonesia is set to introduce a fresh tax on electronic cigarettes beginning January 1, according to an announcement by the country’s finance ministry on Saturday.
As Southeast Asia’s largest economy grapples with one of the world’s highest smoking rates, the government has decided to impose an additional tax of 10 per cent on the excise tariff for electronic cigarettes. The ministry justified the move by citing the long-term health impact associated with prolonged e-cigarette consumption, emphasizing the need to level the playing field between e-cigarettes and traditional tobacco products.
This new tax follows Indonesia’s previous efforts in 2018 when a substantial 57 per cent excise tax was imposed on essences used in e-cigarettes. The country has a history of taxing conventional cigarettes as part of its strategy to discourage smoking.
However, the announcement of the new e-cigarette tax has faced criticism from a group representing e-cigarette producers and customers known as PAVENAS. They raised concerns about the lack of discussion and the timing of the tax implementation, especially considering the expected increase in excise tariffs for these products in the coming year.
In a statement, PAVENAS expressed dissatisfaction with the government’s approach and hinted at the possibility of legal action. The group suggested that they might consider going to court to challenge the tax if the government proceeds with its implementation.
The move to introduce a new tax on e-cigarettes reflects Indonesia’s ongoing efforts to address the health implications associated with vaping while also aligning its taxation policies with the evolving landscape of smoking alternatives.
