Indonesia Imposing 10% Tax on E-Cigarettes Starting 2024

Indonesia e-cigarette tax

Indonesia now imposes a 10% excise levy on e-cigarette products, eliciting fierce criticism from manufacturers and advocates arguing insufficient consultation and disproportionate burden against far more harmful cigarettes taxed moderately higher.

New E-Cigarette Tax Seeks Curbing Youth Adoption

A December 2022 regulation from Indonesia’s Finance Ministry created a dedicated 10% excise tax on e-cigarettes and vape liquids alongside around 10% increased levies on traditional cigarettes. Justification cites leveling the playing field across nicotine categories.

This policy aligns with recent stern government health warnings over emerging vaping risks – including official declarations equating e-cigarette hazards to smoking despite contrary global evidence.

Some public health experts argue Indonesia should instead tax cigarettes higher given indisputable links to disease and applying similar cost deterrence measures against reduced risk alternatives illogically implies risk equivalence.

Vaping Trade Association Decries Surprise Taxation Burden

In a statement, Finance Ministry spokesperson Deni Surjantoro defends the surprise unilateral excise tax against youth uptake worries:

“In the long run, electronic cigarettes affect [public] health, and content falls under controlled consumer goods.”

However vaping trade groups contend the regulation was enacted without proper industry notification or impact discussion. Indonesian Personal Vaporizer Association Secretary-General Garindra Kartasasmita argues:

“The plan was never communicated with us…It should consider most players are small and medium enterprises.”

The association warns struggling vape businesses may fail altogether now facing cigarettes’ tax burden despite far less profitability, limiting adult access while potentially increasing dangerous smoking levels.

Indonesia Battles Enormous Smoking-Related Disease Burdens

While reasons behind exponentially rising Indonesian youth vaping adoption provoking policymaker reactions remain unclear, far more visible concerns persist around smoking:

  • Over 70 million identified Indonesian adult smokers currently with numbers predicted to rise through 2030 by Statista forecasts
  • World Bank links over 225,000 annual Indonesian deaths to smoking-related illness – nearly 14% of all fatalities

Economically developing countries often struggle balancing public health protections and economic priorities. But evidence-based policies aligning cigarette taxation to mortality costs appear prudent starting points given extreme established smoking harms.

Matthew Ma