Indonesia to impose new tax on e-cigarettes from Jan 1

Indonesia will impose a new tax on e-cigarettes from Jan. 1, adding to an excise tax to help curb vaping, the finance ministry said on Saturday.

Southeast Asia’s largest economy has set the additional tax at 10 percent of the excise tariff for electronic cigarettes, which are devices that heat a liquid containing nicotine to create a vapor that users inhale.

The new tax will apply to both imported and locally produced e-cigarettes, as well as the liquids used for vaping, the ministry said in a statement.

The ministry said the new tax was aimed at protecting public health, especially among young people, who are increasingly using e-cigarettes as an alternative to conventional cigarettes.

According to the ministry, e-cigarettes pose health risks similar to those of tobacco products, such as addiction, cardiovascular diseases, and respiratory problems.

The ministry also said that e-cigarettes could undermine the government’s efforts to reduce tobacco consumption, which is one of the highest in the world.

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Indonesia has a population of about 270 million, of whom nearly 60 percent are smokers, according to the World Health Organization (WHO).

The country imposes an excise tax on all kinds of tobacco products, ranging from 28 percent to 57 percent, depending on the type and price of the product.

The ministry said the new tax on e-cigarettes was expected to generate additional revenue of about 1.2 trillion rupiah (US$85 million) in 2024.

The ministry added that it would monitor the impact of the new tax on the e-cigarette industry and consumers, and make adjustments if necessary.