Finance Minister Sri Mulyani Indrawati announced that the government will increase cigarette excise tariffs by 12.5% on average from February 2021, based on several aspects and considerations. She explained that excise on SPM (Machine-Made White Cigarettes) for SPM Tier 1 will increase 18.4% to Rp 935 each, SPM IIA will increase 16.5% to Rp 565 each, and SPM IIIB will increase 18.1% to Rp 555 each. There will also be a SKM (machine-made kretek cigarettes) Tier I increase of 16.9% to Rp 865 each, SKM Tier IIA increase of 13.8% to Rp 535 each, and SKM IIIB increase of 15.4% to Rp 525 each.
Sri Mulyani explained that the increase was decided by the average production volume for each tier. She explained that the SKT segment will not see any increase because this segment absorbs the most manpower. She added that after the increase, the estimated cigarette production growth for SKM and SPM will decrease by around 3.2 percent or 288 billion cigarettes. Furthermore, the government expects the prevalence of child smokers to fall 1.26 percent, from 33.8 percent in 2020 to 32.2 percent in 2021.
Source: Merdeka.com, Jan 27, 2021: