Vapor excise tax four times that of smokes

Indonesia’s Ministry of Finance estimates that the Government may collect up to Rp3 trillion ($207 million) in additional revenue next year from a new excise on vaping liquids, according to a story in The Jakarta Globe.

At the beginning of this month, the Government imposed a 57 percent excise tax on e-liquids containing tobacco extracts or nicotine, a rate the Globe said was more than four times the maximum excise on ‘regular cigarettes’.

The country’s 200 domestic producers are required to start paying excise on e-liquids by October. 31.

Noegroho Wahyu, acting director of excise, said that so far three e-liquid producers were registered to pay excise, but that the government expected the remaining producers to register before the deadline.

The Government is expected to collect Rp50-70 billion in additional revenue from the new excise this year, but it estimates that will rise to about Rp3 trillion per year once all manufacturers are registered.

Aryo Andrianto, chairman of the Indonesian Personal Vaporizer Association (APVI), was quoted as saying that the excise rule meant the government had officially acknowledged the industry and provided it with legal certainty.

Vaping liquid producers were planning to increase their prices by a maximum of 20 percent to soften the blow on consumers, Aryo said, before indicating that the producers were not opposed to the excise tax.

Meanwhile, producers hope that, following the imposition of the excise tax, the government may be more willing to support the industry’s export efforts.

Deni Syarifa, chairman of the E-Liquid Micro-Entrepreneurs Association, estimates that manufacturers could export up to two million bottles of vaping liquid per month.

“There is currently demand for around 5,000 to 10,000 bottles per month from just one country,” Deni said, adding that producers planned to ship the liquid to countries in Asia, Central America and Europe.