Indonesia’s vape tax revenue is expected to reach 175 billion rupiah in 2024

From January 1, 2024, the Ministry of Finance decided to implement a tax policy on vapes, which is expected to generate an annual revenue of 175 billion rupiahs, or 0.82 percent of the annual tobacco tax. In line with traditional cigarettes, the tax rate is 10%.

 

According to Indonesian media katadata1 reported on January 1, Indonesia’s vaping tax has officially come into effect, and Luki Alfirman, director of the General Bureau of Fiscal Balance, according to a press conference, this has enabled the country to obtain 175 billion rupiahs in tax revenue in 2024.

 

This year’s tax revenue is expected to be 175 billion rupiah (about 81 million yuan), accounting for only 0.82 percent of the annual tobacco tax revenue. And even then, it’s not about raising revenue for our country, it’s about fairness. Traditional cigarette producers, such as cigarette farmers and tobacco manufacturers, have been paying taxes since 2014.

 

The tax rate for vapes is 10%, the same as the tax rate for cigarettes previously set by the Ministry of Finance. However, in Article 2 (1) of the Ministerial Regulation No. 143 of 2023, it is clearly stated that e-cigarettes are also included in the tobacco tax.

 

It is the same as the tariff amount previously stipulated, namely PMK115/PMK.07/2013. Article 2 (1) of PMK143/2023 provides that the basis for the collection of tobacco tax is the tobacco excise tax determined by the central Government. Article 2 (2) of PMK143/2023 provides for the provision of e-cigarettes as the subject of tobacco taxation, which “paragraph (1) means that tobacco contains vapes”.