JAKARTA, KOMPAS.com – The Indonesian government has decided to raise the excise tax on tobacco products by an average of 12.5 percent next year.
This was announced by the country’s Finance Minister Sri Mulyani Indrawati in a virtual press conference on Thursday.
Critics said that the move will destroy the industry. Azami Mohammad, coordinator of the National Kretek Preservation Committee (KNPK), argued that currently the business is not going well due to the economic slowdown brought about by the Covid-19 pandemic.
The increase in excise tax on tobacco products will only make it worse, he said.
Meanwhile, as the three state-owned Islamic banks will soon be merged, a new name for the new entity has been revealed by an official. However, it needs approval from the relevant regulator before its official launch.
More details on these and other stories from Indonesia:
1. Indonesia to Increase Tobacco Excise by 12.5 Percent Next Year
The Indonesian government has decided to raise the excise tax on tobacco products by 12.5 percent in 2021, said the finance minister on Thursday.
“We will increase the tobacco excise by 12.5 percent,” said Sri Mulyani Indrawati in a virtual press conference on December 10.
The media reported that the discussion about the excise tax on tobacco products was quite tough this year. The increase in tobacco excise will usually be announced at the end of October. But this year it has been delayed to December.
The delay happened as this year’s discussion was held amid the Covid-19 pandemic, during which the government needs to balance the need for maintaining the health aspects and supporting the industry that employs many workers and farmers.
“So in this case we try to balance the health aspect with the economic condition that is affected by the Covid-19, especially for workers and farmers,” said Sri Mulyani.
The minister said, however, the tax hike will not affect the hand-rolled clove cigarette producers because they are a labor-intensive industry that employs 158,552 workers.