E-Cig Tax To Save Cigarettes!
INDONESIA is to start taxing vape - to stop cigarette smoking from dying out.
All e-liquids will be heavily taxed - by 57 per cent - in a government move which experts believe is to keep the country smoking, which currently boasts the highest smoking rate in the world.
The new vape tax, which goes into affect on July 1st, applies only to e-liquids containing “traces of tobacco plants”, which likely accounts for most of the country's e-cigarette products.
Senior government officials claim the excise tax is part of Indonesia’s efforts to curb consumption of tobacco products but others have admitted it's to keep the country smoking, in which 67 per cent of its male population over the age of 15 are smokers.
Heru Pambudi, director general of customs and excise at the Ministry of Finance, admitted last year that the primary purpose of the tax would be “to limit the consumption of vapes”.
Trade minister Enggartiasto Lukita also told a local newspaper that vapers should just smoke instead, explaining that tobacco farmers would be hurt by a decline in smoking.
He said at the time: “We should turn vapers into conventional cigarette smokers.”
The tobacco lobby is also powerful in Indonesia, according to the Washington Post, with the country one of the few in the world, along with the United States, that hasn’t ratified the World Health Organization’s Framework Convention for Tobacco Control (FCTC).
Cigarette taxes are also low - with Indonesian smokers paying the equivalent of about $2 a pack for cigarettes.
The new vape tax law, however, will affect some 300 e-liquid manufacturers in the Southeast Asian country along with more than 4,000 vape shops.
Indonesia is the fourth-largest country in the world, with more than 260 million people. Tobacco taxes account for most of Indonesia’s excise tax income with this this year’s excise income target set at 155.4 trillion rupiah or US$11.2 billion. The new vape tax is expected to add 100-200 billion rupiah, which equates to about US$7.2 million.