Indonesia: Cigarette Tax in Jakarta to Increase 10 Percent

Source from:  beritajakarta.com (Jakarta Provincial Government) (id)  09/04/2013

As an effort to reduce cigarette consumption by Jakartans, Jakarta Provincial Government is going to increase the cigarette tax to become 10 percent from current cigarette price. The plan is stated on the bylaw draft which has been proposed to Jakarta Parliament (DPRD), to be discussed and ratified into bylaw.

Vice Jakarta Governor Basuki T Purnama said the 10 percent tax increase on cigarette price is intended to influence the people to no longer buy cigarette due to its high price.

"Cigarette tax is supposed to be higher than other tax, so that people would no longer smoking," he stated, Monday (9/2).

According to Basuki, in 2014, Jakarta Provincial Government would get Rp 400 billion of regional original revenue (PAD) from the 10 percent of tax increase on cigarette price.

"The fund from the cigarette tax besides PAD will be used to finance socialization which related to preventive effort and promotion about the danger of smoking for public health," he explained.

Previously, Head of Jakarta Tax Service Department, Iwan Setiawandi, disclosed that one of the issues in the bylaw draft which currently being discussed by Jakarta Parliament is the cigarette tax to be imposed to import as well as local cigarettes. The additional of this cigarette tax is a new tax in the implementing the Act No. 28/2009 about Tax and Retribution.

"The revenue from 10 percent increase on cigarette tax will contribute five percent of Jakarta PAD revenue target," he told. Enditem