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Government to impose 57 percent e-cigarette tax
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E-cigarettes work by heating liquid containing nicotine to generate vapor, which users then inhale, or vape. Many liquids are flavored.
(Shutterstock/File)
T
he government will impose a 57 percent tax on electronic cigarettes, but its implementation has been postponed from July 1 to Oct. 1.
The Finance Ministry’s technical and excise director, Nugroho Wahyu, said selling e-liquid without the additional tax was still allowed until Oct. 1.
“We cannot implement the regulation starting on July 1 because there are many users. We told the vendors they are allowed to sell e-liquid without the additional tax until Oct. 1,” Nugroho said in Jakarta on Tuesday as reported by tribunnews.com.
However, the e-liquid should be produced before July, while liquid produced after July had to be sold with the tax.
The Finance Ministry's Customs and Excise Directorate General has estimated that the revenue from the e-cigarette tax will be between Rp 5 trillion and Rp 6 trillion annually.
The customs office estimated that this year, revenue from the e-cigarette tax from October is expected to reach Rp 200 billion.
The tax is based on Finance Ministerial Regulation No. 146/010/2017 on tobacco.
The tax is relatively high as the average tax on e-cigarettes in other countries is 20 percent, with Russia imposing the highest tax at 81.17 percent, followed by Portugal at 62.92 percent. (bbn)
