The Indonesian Personal Vaporizer Association (APVI) is confident that the government’s Rp2 trillion (US$123 million) e-cigarette tax target will be met this year.
This optimistic outlook follows a 14.2 percent increase from last year’s tax revenue of Rp1.02 trillion, driven by an expected 6 percent annual rise in vape liquid sales.
APVI Chairman Budiyanto highlighted that this year’s tax target is nearly double the 2022 figure, with first-quarter achievements already hitting IDR 1 trillion.
“We hope to meet this year’s tax target, but we need support to combat illegal cigarette and vape products,” Budiyanto told a press conference in South Jakarta on Wednesday, May 29, 2024.
He pointed out that illegal vape products make up about 4 percent of the total market. These products are considered illegal if they do not carry the required tax stamps.
The problem is particularly pronounced with disposable vapes, often sold by vendors along Bali’s beaches, which pose a risk as they are sold without verifying the buyer’s ID.
To address this issue, Budiyanto plans to intensify education and outreach efforts about vaping to the public. The primary goal of these initiatives is to reduce the consumption of illegal vape products.
The number of vape users in Indonesia has reached 6 million, a six-fold increase from the 1 million recorded at the end of 2019.
However, Budiyanto noted that growth has been tempered by the recent 2024 Presidential Election and the ongoing recovery in consumer purchasing power. Despite a slight dip in vape liquid sales, tax revenue has remained on target.
This rise in tax revenue is attributed to the implementation of the E-Cigarette Tax and the increase in e-cigarette excise rates this year. As a result, the price of solid e-cigarettes has risen by 6.49 percent, while the price of open system liquid e-cigarettes has increased by 19.5 percent.
“In terms of quantity, there is a decline in vape liquid sales, but in terms of tax stamp purchases, there has been an increase,” Budiyanto concluded.
