Vapeboss – Several relevant parties believe that an increase in excise duty rates could hinder the growth and investment in the tobacco product industry sector. This is because, in the 2023 Government Budget and Expenditure Plan (RAPBN), the government targets excise revenue from tobacco products (CHT) to reach IDR 245.45 trillion in 2023. This value represents a 9.5 percent increase compared to this year's target of IDR 224.2 trillion.

As part of the tobacco industry, e-cigarettes continue to contribute to the national economy through e-cigarette excise (REL) and other processed tobacco products (HPTL). Over the past two years, two major producers, namely HM Sampoerna and Smoore Indonesia, have started investing in Indonesia. Both have invested IDR 2.3 trillion and IDR 1.12 trillion respectively, not including the potential for new job creation resulting from these investments. Furthermore, as new investors enter the industry, it is believed that the excise duties collected will continue to increase.

In addition, e-cigarette industry players hope that the government will provide incentives so that the industry ecosystem can continue to develop. These incentives are intended as support from policymakers to create a competitive and inclusive business environment.

Garindra Kartasasmita, Secretary-General of the Indonesian Personal Vaporizer Association (APVI), stated that the number of e-cigarette consumers is increasing over time. Many studies indicate that e-cigarettes have lower risks than conventional cigarettes, thus supportive regulations are needed to better safeguard the e-cigarette industry.

"We hope the country can better control the influx of illegal products from abroad, which are currently widely circulated in online markets," Garindra said.

Therefore, he believes that high excise duties will affect the condition of the tobacco product industry, especially the e-cigarette industry. Because market and investment climate are among the reasons for the entry of the e-cigarette industry into Indonesia, 10 companies intend to invest in Indonesia.

"Currently, an increase in excise duty rates is not wise given the many illegal products circulating in the market. What is needed is improved supervision, and certainly, excise revenue will increase significantly," Garindra said.

At the beginning of 2022, e-cigarette excise duties had already increased, especially for closed-system e-cigarettes which have high excise values. The excise rate for this group was known to reach IDR 6,030 per milliliter, higher than the excise duty on other tobacco products.

Minister of Investment, Bahlil Lahadalia, appreciated the investment steps taken by e-cigarette producers and hoped that investors would involve MSMEs. He conveyed that investors should not only absorb a large workforce but also maximize the potential of local human resources.

Source: JPNN