JAKARTA - The government's plan to raise the excise tax rates for tobacco or cigarettes in 2020 makes four cigarette issuers' shares in Indonesia Stock Exchange (IDX) collapse. The increase on excise tax will still be discussed in the House Representatives (DPR), but the increase can be still above 10%.
IDX data noted that at 15.38 (West Indonesia Time), on Monday (2/9/2019), cigarette stocks with the biggest decline were PT Gudang Garam Tbk (GGRM), which collapsed by 4.57% to Rp 66,300/share, which reached by 11% of a decline in the last 5 (five) days.
The second cigarette stock with a significant decline was PT Wismilak Inti Makmur Tbk (WIIM), which was down by 4.33% to Rp 199/share, which was minus 6.13% in the last 5 (five) trading days. Next, PT HM Sampoerna Tbk (HMSP) shares fell by 2.60% to Rp 2,620/share, with a correction of the last 5 (five) trading days at minus 7.42%. PT Bentoel International Tbk (RMBA) also fell by 1.76% to Rp 334/share. But in the last 5 (five) trading days, Bentoel shares edged up by 1.83%.
The government is indeed planning to raise the excise tariff. There are 4 (four) factors as a basis for this increase in excise duty. Head of Sub Directorate of Excise Tariffs and Basic Prices of the Directorate General of Customs and Excise (DJBC) Sunaryo explained that there were consumption control, eradicating illegal cigarettes, the survival of the labor market, and the state revenue, which is from tax revenue," said Sunaryo as quoted from CNBC Indonesia, Monday (2/9/2019). (AM/W)