Indonesia: Import Curbs Not Thought Through

Source from:  Tobacco Reporter 02/18/2016

A 20 percent import limitation on the 'requirements of the tobacco industry', a 60 percent import duty on imported tobacco, and a triple excise duty on cigarettes that utilize imported tobacco are under discussion in relation to Indonesia's Draft Bill on Tobacco Affairs, according to an ACN Newswire story.

But situation might not be as it at first appears. The director of the Beverages, Tobacco Products and Materials Industry Ministry, Willem Petrus Riwu, was quoted as saying that while these matters needed to be addressed soon, he added that the Draft Bill chapters addressing import limitations had to be thoughtfully considered.

"We must evaluate such needs from the perspective of the industry," he said. Currently, according to Willem, many people did not understand the domestic tobacco supply situation.

"As a matter of fact, the total availability of national tobacco is not yet able to fulfil the needs of the industry," he said.

"We must not neglect such a situation, but rather try to find a proper solution."

The chairman of the Association of Indonesian Cigarette Manufacturers (Gappri), Ismanu Soemiran, said that currently domestic tobacco was able to meet less than half of the cigarette industry's needs.

Hence, the parliament's proposal to limit tobacco imports through the Tobacco Draft Law would raise the costs of imports significantly and would certainly hurt the industry. Enditem