Indonesia : 57% tax on e-cigarettes

Presented as a revolutionary alternative to tobacco, the e-cigarette has also been the subject of countless debates since its inception. Despite having a much lower health risk than tobacco (particularly in terms of cancer), the e-cigarette is not universally revered. Still controversial in Russia or India, for example, the e-cigarette is also illegal in public spaces in New York State. Now it’s Indonesia’s turn to limit access and use of the e-cigarette.  

indonesia tax

Indonesia is home to approximately 250 million people. Amongst them, according to data provided by the American Cancer Society, 35% are smokers. In spite of this, Indonesia has not joined the World Health Organization’s FCTC (Framework Convention on Tobacco Control). In addition, the e-cigarette’s development didn’t immediately increase the Indonesian government’s momentum, which only recently announced the new measures.

 

A tax on e-cigarettes instead of an outright ban

tax timeThe Indonesian government recently announced its decision to tax e-cigarettes and related products, rather than formally prohibit use of e-cigarettes. The 57% excise duty tax will take effect on July 1 2018, increasing the price of e-cigarettes and related accessories.

Heru Pambudi, the Director of Customs and Excise, explained the decision, citing a direct link between e-cigarettes and tobacco. The government believes that e-cigarettes should be subject to a tax, just like traditional cigarettes. Heru Pambudi explains that the liquids used in e-cigarettes are made from tobacco, hence the reason for taxation.

If this tax ends up generating extra revenue for Indonesia, Pambudi insists that the government’s main goal is to limit use of the e-cigarette. There are still doubts and concerns about the real health benefits of e-cigarettes, but the latest studies are promising.

Victoria

Victoria has been an e-cigarette enthusiast since the first mechanical models. She brings her legal expertise of e-cigarette legislation in France and around the world.