Indonesia Imposes 10% Excise Tax on Vape Products

Indonesia will start imposing a tax on e-cigarettes from the start of 2024.

The additional levy is on top of the existing excise levy as the country steps up efforts to limit consumption in Southeast Asia’s largest economy.

E-cigarettes will be taxed at 10% of the prevailing excise rate, according to a finance ministry regulation, according to media reports.

In Indonesia, tobacco products are subject to two levies — at central and local government levels — of which 50% of the revenue is earmarked for public health services.

“Long term consumption of electronic cigarettes has been shown to affect people’s health,” the finance ministry said, adding the tax on e-cigarettes is also needed to level the playing field with conventional cigarettes.

A group of e-cigarette producers and customers (PAVENAS) criticized the lack of discussion and the timing of the implementation of the tax, considering excise tariffs for the product will increase next year.

The group said in a statement it may consider going to court to challenge the tax if the government goes ahead with it.