JAKARTA. Today government will announce the cigarette excise rise in 2017. However, Director General of Customs at Ministry of Finance Heru Pambudi refused to give details on the rate of increase.
However, a source of Kontan from the Directorate General of Customs revealed that government will raise the tobacco excise by 10%.
In general, the tobacco excise rise rate is estimated based on the economic growth and inflation target. With a 5.1% of economic growth and a 4 % of inflation rate, tobacco excise is predicted to rise by 9.1%.
It is expected that a 10% of increase in the excise tariff will boost state revenue from tobacco excise in this year and 2017. Furthermore, tobacco businessmen are expected to buy excise banderole at the end of the year, before government imposing a new tariff for the banderole.
Director of Revenues and Strategic Planning at the Directorate General of Taxation Sugeng Aprianto said that as of 27 September 2016, government has collected Rp72.6 trillion of tobacco excise revenues. The number was lower than IDR73trillion of the revenues during the same period in 2015.
Sugeng said that cigarette excise revenues may continue to decrease amid the weak economy recovery.
This year, Ministry of Finance expects to collect Rp146.1 trillion of excise revenues, or 98.7% of the target of 2016 Revised State Budget.
Chairman of Association of Indonesian Tobacco Society Budidoyo expects government not to raise the tobacco excise so high due to public’s low purchasing power. “We expect the increase rate is only ranging from 5% to 6%”, said Budidoyo.
(Muhammad Farid/Translator)
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