APSN Banner

Indonesia begins imposing e-cigarette tax on January 1

Jakarta Globe - December 30, 2023

Faisal Maliki Baskoro, Jakarta – The Ministry of Finance has implemented a policy to levy a tax on electronic cigarettes (e-cigarettes), also known as vape, effective from Jan. 1, 2024.

Deni Surjantoro, Head of the Communication and Information Service Bureau of the Ministry of Finance, said that the purpose of imposing this tax, on top of the excise duties, is to control tobacco consumption among the public.

"The government had provided a transition period for the collection of taxes on e-cigarettes since the imposition of excise duties in mid-2018," Deni said Saturday.

According to the ministry, both e-cigarettes and traditional cigarettes are equally harmful. However, e-cigarettes were only brought under excise tax regulations in 2018. The decision to tax electronic cigarettes emphasizes the principle of fairness, taking into account that conventional cigarettes involve tobacco farmers and factory workers who have been paying cigarette taxes since 2014.

"In the long term, the use of electronic cigarettes is suggested to have health implications, and the components found in electronic cigarettes are deemed as consumer goods requiring regulation," stated the official.

The revenue from e-cigarette taxes in 2023 amounted to Rp 1.75 trillion ($113.7 million), or about 1 percent of the total revenue from tobacco excise annually. More than 50 percent of the revenue from cigarette taxes will be directed toward public health services and law enforcement, supporting better public services.

Source: https://jakartaglobe.id/business/indonesia-begins-imposing-ecigarette-tax-on-january-