Vapeboss – The tobacco product industry (IHT) is one of the strategic domestic sectors that has high competitiveness and continues to make a significant contribution to the national economy. This sector, categorized as local wisdom, contributes to job creation, state revenue through excise taxes, and serves as a vital commodity for farmers through the cultivation of tobacco and cloves.

The Ministry of Industry noted that state revenue from IHT, derived from excise and taxes, increases annually. In 2016, IHT contributed IDR 138.69 trillion in excise duty, or 96.65 percent of the total national excise.

Vape liquid (e-cigarettes) is one type of Other Tobacco Products (HPTL), and according to the provisions of PMK 146/2017, vape liquid (e-cigarettes) is subject to an excise duty rate of 57%, which has been in effect since July 1, 2018. Specifically for HPTL, the excise duty rate for tobacco products is set at 57% of the Retail Selling Price proposed by the tobacco product factory entrepreneur or importer.

This HPTL tobacco product excise rate for each tobacco product factory entrepreneur or importer is determined by the Head of the Main Customs and Excise Office or the Customs and Excise Supervision and Service Office by issuing a decision on the determination of the tobacco product excise rate. Furthermore, the HPTL Retail Selling Price must be in multiples of IDR 25.00 (twenty-five rupiah).

Aryo Andrianto, Chairman of the Indonesian Personal Vaporizer Association (APVI), stated that the e-cigarette industry has the potential to become a leading new industry. According to Aryo, there are currently 5,000 e-cigarette or vape industry players, including retail stores, spread across Indonesia.

"The e-cigarette industry has been around for 10 years in Indonesia and only gained attention in 2017, was subjected to excise in 2018, and has continued to develop until now," Aryo said in a discussion about addictive substances in the Health Bill in Jakarta, some time ago.

Last year, the total excise duty contribution from vape to the state reached IDR 1.02 trillion and has the potential to continue increasing. With the growing number of vape businesses, the contribution to state revenue is quite significant. The vape industry in Indonesia is predicted to continue to grow, thus contributing to the national economy.

"This figure is predicted to increase given that the government plans to raise e-cigarette excise rates by 15% in 2023 and 2024," Aryo said.

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