United States-based Juul Labs is exploring selling its compact vaping devices in Asia and has sounded out government officials in Indonesia, one of the world's most smoker-friendly countries, although gaining approval there could face significant hurdles. (Reuters Photo/Lucas Jackson)

Gov't to Impose 57 Percent Excise Tax on Vape Oil


NOVEMBER 03, 2017

Jakarta. The government will impose a 57 percent excise tax on vape oil next year, instead of banning electronic cigarettes, as previously planned.

Finance Minister Sri Mulyani Indrawati signed a ministerial regulation on the excise on processed tobacco products, known as HPTL, on Oct. 24. The new values are available here (in Indonesian).

"The main ingredient in this kind of cigarettes is a liquid made of tobacco, which is subject to tax, in accordance with the Tobacco Law," director general of customs and excise at the Ministry of Finance, Heru Pambudi, said on Thursday (02/11), as quoted by Antaranews.com.

Heru admitted that he still needs to calculate the potential additional revenue the new tax can bring to the state's coffers. He said, however, that the most important part of the policy is to limit the consumption of vapes.

The new tariff for HPTL will come into force on July 1.

Besides vape oils, snuffs and chewing tobacco products, the government is considering an excise tax on electronic cigarettes, which are increasingly popular in Indonesia, and attract children with their sweet flavors.

Customs and excise tax collection reached Rp 126.9 trillion ($9.4 billion) as of Oct. 31, about 67 percent of the government's target. Nearly 96 percent of the Rp 95.9 trillion excise came from tobacco-related products.