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Tobacco product excise estimated to fall behind target this year

Tempo - September 15, 2023

Amy Heppy, Jakarta – Director of Communication and Publication of the Directorate General of Customs and Excise Nirwala Dwi Heryanto stated that tobacco products excise or cigarettes excise in Indonesia only reached Rp126.8 trillion at the end of August. This number equals 54.53% of the total target in the 2023 State Budget, amounting to Rp232.5 trillion.

Nirwala believed tobacco products excise will fall behind target in 2023. "Based on the temporary outlook, cigarette excise [in 2023] will reach 93.8% of the provided target with Rp218.1 trillion," Nirwala said when met in Sidoarjo on Wednesday, September 13, 2023.

According to Nirwala, there are three main factors causing the situation. "It is caused by three things, namely down trading to [cigarettes] category 2, shifting consumption to electric cigarettes, and illegal cigarettes distribution," he said. Down trading refers to the phenomenon of people consuming cheaper cigarettes from the more expensive, category 1 cigarettes.

To reach the target, Customs and Excise has been trying to draft several strategies. The strategies are reinforcement of regulation and supervision including operations to combat illegal cigarettes, reinforcement of customs and excise post-clearance audit, an improvement on user profiling, and intensification of illegal smuggling eradication.

Another strategy is the improvement of technology and information services by simplifying the service. Meanwhile, from an excise perspective, the DG will optimize supervision of the illegal distribution of excisable goods, through market operation and public communication campaigns.

Source: https://en.tempo.co/read/1772055/tobacco-product-excise-estimated-to-fall-behind-target-this-yea