JAKARTA, Sept. 30 (Xinhua) -- Indonesian cigarette makers will face an excise tax increase next year, which subsequently will affect retail prices of the so-called cancer stick, as the government seeks to boost tax revenue and curb smoking.
Indonesian Finance Ministry on Friday announced its new excise tax regulation which will come into effect starting Jan. 1.
According to the new regulation, all cigarette manufacturers, in line with their production capacity, will see an average 10.54 percent increase. The planned increase will also follow an 11. 3 percent rise this year.
"After all the discussions and meetings, we concluded that excise tax increase is needed in order to control (cigarette) consumption and production," Finance Minister Sri Mulyani said in a statement.
The Indonesian government is targeting excise tax revenue of 149.88 trillion (about 11.53 billion U.S. dollars), up 5.78 percent from this year's target.
The minister on Friday added that retail prices for cigarettes will increase by an average 12.26 percent next year.
Cigarette prices in Indonesia remain among the lowest in Southeast Asia, ranging from 9,000 to 20,000 rupiah for a pack of 20. That's far less than those in neighboring Malaysia, Singapore and Brunei, where a pack goes from about 3.30 U.S. dollars to as high as 9.70 U.S. dollars, according to cigaretteprices.net.
The move is also part of the government's bid to discourage smoking among people in Indonesia which has one of the highest smoking rates in the world and virtually no restrictions on cigarette sales or advertising.
Under the government's road map for the tobacco industry, national cigarette production is limited to 260 billion sticks a year by 2020, but producers have routinely exceeded this target figure each year.
With some 65 million smokers, Indonesia has the world's third largest smoking population after China and India, and remains the only country in the Asia-Pacific region that has not ratified the World Health Organization's Framework Convention of Tobacco Control, which seeks to curb tobacco consumption through advertising restrictions and pictorial warnings on cigarette packs.
