Vapeboss – The government has set an increase in excise tariffs for e-cigarettes by 15% and other processed tobacco products (HPTL) by 6%, effective for five years from 2023 to 2027. Previously, excise increases were only done once a year.

Regarding this, Minister of Finance (Menkeu) Sri Mulyani Indrawati gave reasons why the increase in excise tariffs for the e-cigarette sector was directly for 5 years or multiyear (more than one year).

"This multiyear approach is indeed an aspiration to provide certainty because if it's like this every year, there will be continuous drama. So, there is a desire for a kind of multiyear approach, for certainty," she said in a meeting with Commission XI of the House of Representatives, Monday (12/12/2022).

According to Sri Mulyani, the implementation of a multiyear system for excise tariff increases goes hand in hand with the formulation of a roadmap for the transformation of the tobacco industry.

Furthermore, Sri Mulyani explained that the specific reason why e-cigarettes and HPTL, whose excise tariffs have been increased for 5 years, is that there are other things that need to be considered. She mentioned that the local content of these two types of products is very small, while on the other hand, their health impacts are very dominant.

"So there's a fear of penetration downwards. This is a matter of protecting children because that penetration, with various flavors, will enter. Meanwhile, in terms of local content, in terms of everything else, there is none at all. That's why the concern is health," said Sri Mulyani.

Therefore, President Joko Widodo (Jokowi) approved the proposal of his staff and made the decision to raise the excise tariffs for e-cigarettes and HPTL directly for the next five years at a cabinet meeting held some time ago.

"At that time, Mr. President also agreed when it was proposed, 'well, let's just make it five years,' he concluded.

Source: Kontan