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DGCE Director General Heru Pambudi confirmed that the government will announce policies related to the cigarette excise (CHT) tariffs increase in 2021 at the end of September or early October.

Heru refused to provide an overview of the formulation for the increase, however, he did say the increase is usually calculated from the inflation target and projected economic growth for next year. “If next year’s economic growth is 5 percent and inflation is at 3 percent, the CHT rate increase should be above 8 percent. The Fiscal Policy Agency (BKF) will determine it,” he said.

Previously, DGCE Director of Technical and Excise Facilities, Nirwala Dwi Heryanto, stated that the government was also considering the pandemic situation that had reduced cigarette consumption. DGCE data until August 2020 shows that cigarette excise revenue makes up the largest portion of excise revenue, and until August 31, had contributed Rp94.39 trillion representing growth of 6.09 percent.

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