Indonesian Govt Planning To Raise Cigarette Tax

The government is planning to raise cigarette tax by 6 to 7 percent next year in an effort to increase state revenue and Reduce cigarette consumption, Director General for Customs and Excise Affairs Anwar Suprijadi said.

"The increase in cigarette tax will not be high. It will be adjusted to the assumed inflation rate in the 2009 state budget," ANTARA news agency quoted the director general as saying at the Finance Ministry building here on Thursday. He said the government would soon disseminate information on its plan to raise the tax duty on Cigarettes in 2009. "We also have the mission to maintain public health in connection with the plan to increase cigarette taxes and to Reduce Cigarettes consumption," Anwar Suprijadi said. He said that with a high Cigarettes tariff it was hoped that Cigarettes consumption and production could be Reduced. "We already have the policy in hand we are going to popularise, after which we would take the next steps," he said. When asked on what types of tariffs that the government is going to impose, the director general said that it tended to impose a specific tariff. "But we need to create harmony so that it would not cause a gap between sMall-Medium enterprises and big companies," he said. In the 2009 state budget, the government has set a target to collect a state revenue amounting to Rp48.24 trillion from tobacco tax duties. (RM1=Rp3.10) According to Anwar Suprijadi, the government's revenue target from excise duties in 2009 increased Rp3 trillion to Rp49.49 trillion from Rp45.72 trillion in 2008. "The increase of the Cigarettes tax alone is about Rp2 trillion to Rp48 trillion," the director general said. He said that in an effort to achieve the target, the government would continue to enforce the law, simplify administrative procedures and introduce specific tax duty tariff.

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