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Jakarta Post

Analysis: Awaiting certainty on cigarette industry regulation

  • Nadia Kusuma Dewi


Jakarta   /   Wed, August 21 2019   /  02:22 am

The government has revived its plan to combine tobacco companies’ output of machine-made clove cigarettes (SKM) and white cigarettes (SPM) for tax purposes. Previously, the government had issued Finance Ministerial Regulation No. 146/2017, Article 3 of which stipulates that a tobacco product manufacturer who produces SKM and SPM will be categorized based on the total number of cigarettes output. The categorization is required to determine the tobacco excise charged to the company.As a consequence, manufacturers whose total production of SKM and SPM exceeds 3 billion cigarettes will be subject to the highest tariff applied to each type of cigarette. This regulation came into effect on Jan. 1. However, in December 2018, the government issued Finance Ministerial Regulation No. 156/2018 to amend the former regulation. In the new regulation, the government removed provisions on combined lim...