Vapeboss – The government officially announced the increase in Tobacco Products Excise Tax (CHT) on November 3, 2022. The percentage increase in excise tax rates for conventional cigarettes is 10 percent for the next two years, while for the electronic cigarette (e-cigarette) group, it is 15 percent for 5 years.

In this regard, the Chairman of the Indonesian Electronic Nicotine Delivery System Alliance (APPNINDO), Teguh Ari Wibowo, hopes that the government will provide excise relief for the e-cigarette industry, as the industry is still recovering after the pandemic.

“We desperately need support and protection from the government, considering that we are all currently in a state of economic recovery after the pandemic,” Teguh said.

Teguh also explained that the e-cigarette industry has contributed to supporting the country's economic growth. Not only does it increase state revenue, but the e-cigarette industry also employs 80 to 100 thousand workers.

Nevertheless, the excise issue is not just about increasing the rates. The Head of the Macroeconomic and Financial Center at the Institute for Development of Economics and Finance (INDEF), Rizal Taufik, stated that the disparity or differentiation of excise duties in e-cigarette variants is a crucial issue.

As an innovative product, e-cigarettes are currently differentiated in terms of tariff setting due to categories such as open and closed systems.

“Indeed, the excise disparity for each group is the main problem. Even now, it is still a critical topic of discussion,” Rizal said.

He believes that the government needs to strive to ensure that excise determination is not differentiated between groups. The excise policy, especially for e-cigarettes, should be closely monitored by the government. In addition, the government also needs to evaluate the rates for e-cigarette user groups so that the information needed is valid and reliable.

Not long ago, Professor Fajar Mukti from Universitas Muhammadiyah Yogyakarta also agreed with Rizal. He stated that differences in excise grouping have the potential for business monopolies.

He emphasized that e-cigarette excise is still differentiated by type, and the rates are up to 13 times higher. Referring to the Regulation of the Minister of Finance of the Republic of Indonesia No.193/PMK.010/2021, open-system e-cigarettes are subject to an excise tax of IDR 445/milliliter, while closed-system e-cigarettes are subject to IDR 6030/milliliter.

Mukti believes this regulation is "unfair treatment" for business actors, which ultimately harms consumers. This is because consumers have to pay more to enjoy closed-system e-cigarette products.

Mukti also suggested that the excise tax rate on liquid e-cigarettes should be equalized. This is expected to encourage open-system and closed-system liquid e-cigarette businesses to compete fairly. In addition to being able to encourage investment and absorb domestic labor, consumers also have the opportunity to choose more varied alternative products.

Source: Jawapos