Indonesia to impose excise tax on liquids for e-cigarettes

JAKARTA, June 5 (Reuters) - Indonesia will impose an excise tax of 57 percent on tobacco essences used for electronic cigarettes starting July 1 as part of efforts to curb consumption of tobacco products, a senior official said late on Monday.

Southeast Asia’s largest economy imposes excise duty on all kinds of tobacco products but the country has one of the highest smoking rates in the world.

Sunaryo, an official with the Customs and Excise Office, said the vape juice excise tax would be an expansion of the current excise tax rules for tobacco products.

Tobacco accounts for the bulk of Indonesia’s excise taxes which are a significant source of government revenue.

The new excise tax would only apply to juices that contain traces of tobacco plants so that “consumers can be more protected,” Sunaryo said.

This year’s revenue target from excise duties is 155.4 trillion rupiah ($11.20 billion). The new excise tax is expected to contribute around 100-200 billion rupiah a year, Sunaryo said.

Currently, there are about 300 unsupervised liquid makers known as brewers in Indonesia, producing various liquid products to more than 4,000 vape stores and 900,000 smokers, the customs office estimates.

Indonesia has a plan to also impose excise taxes on plastic bags this year. Sunaryo declined to comment on when that plan would be enacted. ($1 = 13,875.0000 rupiah) (Reporting by Tabita Diela Editing by Jacqueline Wong)