Monday, 13 Sya'ban 1441 / 06 April 2020

Monday, 13 Sya'ban 1441 / 06 April 2020

Tobacco industry weakens due to increase of excessive excise

Rabu 26 Aug 2015 03:34 WIB

Rep: C09/ Red: Julkifli Marbun



REPUBLIKA.CO.ID, JAKARTA –- Target of tobacco tax in 2016 reached Rp 148.9 trillion as stated in the financial notes about State Budget Bill 2016 that was read in front of the House of Representatives by the President Joko Widodo, Friday (14/8).

Compared to other commodities that were subjected to excise tax, tobacco products were a major source of excise tax with 96 percent of the tax. It also be the only product that was hit by a significant increase in excise tax.

"The increase of excise targets in 2016 by 23 percent is very excessive, compared with previous years which the increase was seven to nine percent. Again, the tobacco industry weakens, because the target was determined without considering the purchasing power of consumers," said Chairman of the Indonesian White Cigarette Manufacturers Association (Gaprindo), Muhaimin Moefti, Tuesday (25/8).

The increase of tobacco tax revenue target in 2016 was a blow to the national tobacco industry. This increase was considered as burdensome because it reached 23 percent, compared with excise targets 2015 stated in the state budget, which was signed in September 2014, which amounted to Rp 120.6 trillion.

The increase of of tobacco tax revenue target was launched without seeing the continuity of long-term national tobacco industry. The government issued PMK 20/PMK.04/2015 about the the elimination of deferred payment facility of excise bands, through the mechanism of acceleration of payment.

Muhaimin said the impact of the increase of excise excessive target will be directly felt by cigarette manufacturers, labor and tobacco and clove farmers. In the past five years, hundreds of tobacco companies bust up.

"Now, if the government insisted to raise the excise targets by 23 percent, then this is an attempt to eliminate livelihoods of millions of people who depend on the tobacco industry," said Muhaimin.

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