Vapeboss – The trend of e-cigarettes is increasingly popular among various segments of society. In Indonesia, there are currently approximately 2.2 million users of Other Tobacco Product Processing (HPTL) products, including e-cigarettes.

Edy Sutopo, Director of Beverage, Tobacco Product, and Refreshment Industries at the Ministry of Industry, is preparing the standardization of e-cigarette products as an effort to attract investors and is believed to boost foreign exchange and absorb labor, thereby stimulating the national economy.

"There are several e-cigarette manufacturers interested in investing in Indonesia. To our knowledge, there are about 10 companies currently in the exploratory stage," said Edy.

Edy sees that the continuously growing potential of the e-cigarette business can open opportunities for cigarette manufacturers to invest in this sector.

"With such rapid development, the government certainly needs to give more attention," he said.

The Ministry of Industry is currently preparing regulations and developments related to product quality according to the Indonesian National Standard (SNI), which continues to follow technological advancements, consumer needs, and regulations. Additionally, further research is needed because e-cigarette products may only be consumed by individuals aged 18 and above.

"The government is also encouraging research and development for the nascent e-cigarette industry so that the products produced can meet consumer standards and have a smaller impact on health," explained Edy.

Edy stated that the government's recognition of e-cigarette products is demonstrated by the imposition of excise taxes. In 2018, when excise duties were first imposed, the contribution of e-cigarette excise reached 98.9 percent and rapidly increased to 629.3 percent in 2021.

"Policy-wise, the government has recognized the existence of the e-cigarette industry, as proven by the imposition of excise duties," he said.

Therefore, this year, excise revenue from e-cigarettes is targeted to contribute up to 1 trillion rupiah. This figure is an increase compared to 2021, which was approximately 629 billion rupiah.

Teguh Basuki Ari Wibowo, Chairman of the Indonesian Electronic Nicotine Delivery System Entrepreneurs Alliance (APPNINDO), stated that his organization has asked the government to relax excise rates for next year.

Currently, excise duties are regulated under PMK Number 193/2021 concerning Excise Rates for Tobacco Products in the Form of E-cigarettes and Other Tobacco Processing Products.

Relaxation is needed given the relatively small scale of the e-cigarette industry. In 2021, the contribution of e-cigarettes to state excise revenue from the tobacco product industry (IHT) was Rp629.3 billion, or only 0.3 percent of total tobacco product excise revenue.

"With a tax contribution of still 0.3 percent of the total IHT products, we hope for a relaxation of excise rates from the government for next year," said Teguh.

According to him, business actors hope that the government will provide relaxation to the e-cigarette industry because it is a labor-intensive sector.

"Approximately 80 to 100 thousand people have been absorbed into the workforce. Of course, if there is relaxation, it will be an opportunity to increase state revenue," said Teguh.

Source: Nusantaratv