As of January 1, Indonesia has implemented its e-cigarette tax, as reported by Indonesian media katadata. Luky Alfirman, the director of the General Administration of Financial Balance, announced during a press conference that this move is expected to generate Rp.175 billion in tax revenue for the country.
While the anticipated revenue accounts for only 0.82% of the annual tobacco tax revenue, the imposition of the e-cigarette tax is seen not merely as a means to increase state income but rather as a move towards fairness. Traditional tobacco producers, including tobacco farmers and tobacco production factories, have been subject to taxes since 2014.
The tax rate for e-cigarettes has been set at 10%, aligning with the previously established tobacco tax rate by the Ministry of Finance. Ministerial Regulation No. 143 of 2023 explicitly includes e-cigarettes in the tobacco tax list, emphasizing the equivalence of tax treatment. This tariff aligns with the previous specifications outlined in PMK 115/PMK.07/2013.
According to Article 2(1) of Ministerial Regulation No. 143 of 2023, the basis for levying tax on cigarettes, including e-cigarettes, is determined by the excise duty fixed by the Central Government, maintaining consistency with earlier regulations (PMK 115/PMK.07/2013).
