Nirwala Dwi Heryanto, the director of technicalities and excise facility at the Customs and Excise Directorate General, said on Tuesday that the plastic excise was part of the government’s efforts to reduce the amount of single-use plastic waste. The excise is planned to be imposed only on single-use plastic with a thickness of less than 75 microns.

The government has planned that about Rp 500 billion (US$34.5 million) out of the targeted Rp 165.5 trillion overall excise revenue next year would come from plastics.

It sees that applying excise could be a way to deter people from using single-use plastic bags.

A case in point where plastic bag waste had become a problem was at the Bantar Gebang landfill in Bekasi, West Java, which accounted for about 14 percent of total waste and growing, Nirwala said.

However, he denied that single-use plastic bag excise was aimed to boost excise growth in the state revenue.

“We’re not looking to increase the state revenue from this excise but merely as a way to make people reduce the use of plastic bags that can harm our environment,” Nirwala said during a panel discussion at the Office of the Coordinating Economic Minister in Jakarta.

A researcher from the Fiscal Policy Agency (BKF), Joko Tri Haryanto, agreed that excise could be a way to change people’s behavior as higher prices for plastic bags could act as shock therapy for users, which would later force them to reduce or even abandon the use of plastic altogether in the future.

Center for Indonesia Tax Analysis (CITA) executive director Yustinus Prastowo said excising plastics could also make Indonesia achieve what was called a double dividend, where the country could gain additional income, while saving the environment at the same time.

Before the excise could be implemented, Secretary to the Coordinating Economic Minister Susiwijono Moegiarso said related ministries and institutions, in this case the Finance Ministry and its Customs and Excise Directorate General, should create derivative regulations to support the policy.

However, industry players remained wary of the plan, adding that it could hinder economic and industry growth.

The Indonesian Olefin, Aromatic and Plastic Industry Association (Inaplas) said excising plastics would not tackle the problem of plastic waste in the country.

“Our main problem is not the use of plastic, but rather in the waste management system,” its secretary-general, Fajar Budiono, said, adding that instead of applying excise for plastics, the government and citizens should practice a better waste management system by sorting out waste for recycle purposes.

Industry Minister Airlangga Hartarto told kompas.com recently that excising plastic could weaken the country’s competitiveness and lower national industry growth.

Fajar pointed out that weakening the plastic industry growth could drag down value-added tax (PPN) and income tax (PPh), so that state revenue would eventually be negatively affected.

Imposing excise on single-use plastic bags could also slowly strangle small- and medium-sized plastic industry players to death as they supplied about 60 percent of plastic bags used in traditional markets, he said.

Furthermore, he added, there was no substitute for single-use plastic bags that were as cheap and durable as the current ones. “Even if there is a new compostable plastic made from cassava, it’s still very costly for retailers and it doesn’t have the same durability as the high-density polyethylene [HDPE] bags.”

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