JAKARTA - The government has set a new average cigarette excise rates increase of 12.5% which will take effect in February 2021. This was conveyed by Sri Mulyani Indrawati, Finance Minister at a Working Meeting (Raker) with Commission XI of the House of Representatives (DPR), yesterday (27/1).
She conveyed that the increase in excise rates on IIB Machine Clove Cigarettes (SKM) and IIB Machine White Cigarettes (SPM) was higher than that of SKM IIA and SPM IIB. "The excise rate for Hand-Rolled Clove Cigarettes (SKT) has not increased due to considering the impact of the COVID-19 pandemic on this sector," she said.
The details of the rate increase include, SKM I increased 16.9% with excise to IDR 865 per cigarette, SKM IIA increased by 13.8% with excise of IDR 535 per cigarette, SKM IIB increased by 15.4% with excise of IDR 525 per cigarette, SPM I increased 18.4% and excise IDR 935 per cigarette, SPM IIA increased 16.5% and excise IDR 565 per cigarette, and SPM IIB increased 18.1% with excise increased to IDR 555 per cigarette.
On the other hand, Bertu Melas, Member of Commission XI of the House of Representatives, said that the increase in excise rates needs to be accompanied by incentives for industries that have an impact on tobacco farmers. "Tobacco leave increases every year but farmers are under pressure from an increase in excise rates. Tobacco products are absorbed by small industries instead of large industries based on research results," he said. (LK/LM)