Government Decides to Increase Cigarette Excise Rates by 10% in 2023 and 2024

JAKARTA. The government has decided to increase the tobacco product excise rate (CHT) by an average of 10% starting in 2023 and 2024. However, the increase in the CHT rate will not be the same for each group.

So far, the determination of CHT rates is divided into three groups, namely Machine-made Rolled Clove Cigarettes (SKM), Machined-made White Cigarettes (SPM), and Handmade Cloves Cigarettes (SKT).

Quoting Kontan.co.id, CHT rates for SKM I and II groups will increase between 11.5% to 11.75%. Then, for SPM I and SPM II it rose between 11% to 12%, and the CHT SKT I, II and II rates rose 5%.

In addition, the government will also increase CHT rates for e-cigarettes and Other Tobacco Processing Products (HPTL), by 15% and 6%, respectively, over the next five years.

Read: No Longer Manually, The Filing of Customs and Excise Objections Will Be Online From 2023

Reducing Cigarette Consumption

The determination of the new rates is carried out by considering various aspects such as employment, the development of the cigarette industry, and the target of reducing the prevalence of smokers in children aged 10-18 years to 8.7%.

The prevalence target is as stated in the National Medium-Term Development Plan (RPJMN) for 2020-2024.

With the increase in CHT rates, it is expected that the price of cigarettes will become increasingly unaffordable for the poor, thereby reducing their consumption.

This decrease in consumption is crucial, considering that cigarettes are the second largest item consumed by poor households, namely 12.21% in urban areas and 11.63% in rural areas.