Current Affairs
Sri Mulyani Has Officially Increased Cigarette Excise Duty in 2022 by An Average of 12 Percent.
December 14, 2021

Minister of Finance Sri Mulyani has officially increased cigarette excise duty in 2022 by an average of 12 percent, this was stated in the Press Statement on the 2022 Tobacco Excise Policy on Monday (12/13). The increase in cigarette excise rates is different for each category.

Following are the price increases by category:

  • The highest increase was applied to the Machine-made Kretek Cigarette I category from the previous tariff of Rp. 865 to Rp. 985, an increase of 13.9 percent.
  • Machine-made Kretek Cigarette IIA experienced a 12.1 percent increase from IDR 535 to IDR 600 as well as IIB increased by IDR 14.3 percent from IDR 525 to IDR 600.
  • Machine-made White Cigarette I also increased from Rp 935 to Rp 1,065, an increase of 13.9 percent. Then Machine-made White Cigarette IIA increased from Rp 565 to Rp 635 or 12.4 percent.
  • Meanwhile, Machine-made White Cigarette IIB increased from Rp. 555 to Rp. 635, an increase of 14.4 percent.
  • Hand Kretek Cigarettes experienced the lowest increase, namely a maximum of 4.5 percent. For SKT IA, the tariff increases from Rp 425 to Rp 440, an increase of 3.5 percent.

Sri Mulyani hopes that with this increase, cigarette production can be reduced by about 3 percent. Then the increase in excise duty will also raise the cost index from 12.7 percent to 13.78 percent.
From the health aspect, Sri Mulyani targets that with this increase in excise rates, the prevalence of adult smoking can decrease from 33.2 percent to 32.26 percent and reduce the prevalence of smoking in children from 8.97 percent to 8.83 percent, approaching the target in the RJPMN. However, Sri Mulyani admits that the increase in cigarette excise rates will have the effect of reducing the number of workers from 457 to 990 people. Meanwhile, tobacco excise revenue in 2022 is targeted to reach Rp 193.53 trillion. The cigarette excise tariff will take effect on January 1, 2022.

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