TheJakartaPost

Please Update your browser

Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.

Jakarta Post

Time to quit?: Tobacco excise hike, weak purchasing power to hit cigarette makers

The government will increase cigarette excise taxes by an average of 12.5 percent in February of next year.

Riska Rahman (The Jakarta Post)
Premium
Jakarta
Mon, December 14, 2020

Share This Article

Change Size

Time to quit?: Tobacco excise hike, weak purchasing power to hit cigarette makers Workers roll clove cigarettes by hand at the PT Wismilak Inti Makmur factory in Surabaya, East Java, on Jan. 6, 2017. (AFP/Juni Kriswanto)

T

he government’s decision to increase the excise tax on tobacco and tobacco products in 2021 is expected to negatively affect cigarette makers, analysts have said, amid weakened purchasing power as a result of the pandemic.

The government will increase cigarette excise taxes by an average of 12.5 percent in February of next year.

“The majority of the companies’ sales volume comes from machine-made clove cigarettes, including those of [publicly listed cigarette makers] PT HM Sampoerna and PT Gudang Garam,” Mirae Asset Sekuritas analyst Christine Natasya wrote in a research note on Thursday.

Finance Minister Sri Mulyani Indrawati announced on Thursday that the tariff hike was only applicable to machine made clove cigarettes and machine-made white cigarettes. The excise tax on hand-rolled cigarettes would remain unchanged to protect the industry as it employed a large number of workers.

Read also: Cigarette excise tax, employment and industry income

The move aimed to balance public health and the economy so that workers and farmers who had already been affected by the COVID-19 pandemic would not suffer further, she said as reported by kompas.com.

HM Sampoerna spokesperson Elvira Lianita said on Friday the company was “still studying the excise policy as it was just announced, and the Finance Ministry has yet to issue a regulation on the matter”.

to Read Full Story

  • Unlimited access to our web and app content
  • e-Post daily digital newspaper
  • No advertisements, no interruptions
  • Privileged access to our events and programs
  • Subscription to our newsletters
or

Purchase access to this article for

We accept

TJP - Visa
TJP - Mastercard
TJP - GoPay

Redirecting you to payment page

Pay per article

Time to quit?: Tobacco excise hike, weak purchasing power to hit cigarette makers

Rp 29,000 / article

1
Create your free account
By proceeding, you consent to the revised Terms of Use, and Privacy Policy.
Already have an account?

2
  • Palmerat Barat No. 142-143
  • Central Jakarta
  • DKI Jakarta
  • Indonesia
  • 10270
  • +6283816779933
2
Total Rp 29,000
{

Your Opinion Matters

Share your experiences, suggestions, and any issues you've encountered on The Jakarta Post. We're here to listen.

Enter at least 30 characters
0 / 30

Thank You

Thank you for sharing your thoughts. We appreciate your feedback.