Indonesia to impose new tax on e-cigarettes from Jan 1

JAKARTA: Indonesia will impose a new tax on e-cigarettes from Jan. 1, adding to an excise tax to help curb vaping, the finance ministry said on Saturday.

Southeast Asia’s largest economy has set the additional tax at 10% of the excise tariff for electronic cigarettes, the ministry said in a statement.

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

The new tax comes after Indonesia, which has one of the highest smoking rates in the world, in 2018 imposed a 57% excise tax on essences used for e-cigarettes. The country has long taxed conventional cigarettes.

A group of e-cigarette producers and customers (PAVENAS) criticised the lack of discussion and the timing of implementing 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.