According to a report by Kompas on December 29, the Indonesian government will officially impose consumption tax on vapes from January 1, 2024. This regulation clearly states that a 10% tobacco tax will also be levied on vape products.
The release of this new regulation has attracted the attention of entrepreneurs in the vape industry. The Indonesian vape business association Paguyuban Asosiasi Vape Nasional Indonesia (Pavenas) expressed regret over the government’s decision as they had previously requested the Ministry of Finance to postpone the implementation of vape taxes.
Garindra Kartasasmita, secretary-general of the Electronic Cigarette Enterprises Association, said in a statement on December 29: “Today, December 27, 2023, we were informed of the government’s decision to start from 2024 The vape tax will be implemented on January 1, 2020. This unilateral decision has a direct impact on our business operations, which is unacceptable to us. We have always complied with government regulations.”
The implementation of the new regulations means that vape products will face two types of tax burdens, including tobacco taxes and additional excise taxes.
The Indonesian government recently announced that it will impose consumption tax on vapes starting from January 1, 2024. This move has attracted widespread attention in the industry. However, as a brand that actively promotes the compliance development of vapes, GUUTUU vape believes that this tax policy may bring certain challenges to the development of the industry.
According to a report from Kompas on December 29, the Indonesian government will implement a consumption tax on vapes from January 1, 2024, and made it clear that it will impose a 10% tobacco tax on vape products. The release of this tax policy caused uneasiness and concern in the vape industry. As an important participant in the industry, GUUTUU vapes believe that this may bring certain challenges to the development of the industry.
First, imposing consumption tax and tobacco tax on vape products may increase product prices and impose an economic burden on consumers. As an alternative to traditional cigarettes, vapes should be actively supported and encouraged by the government to promote public health. However, the implementation of tax policies may lead to price increases, making vape products more expensive for some potential users, thereby reducing people’s willingness to adopt vapes.
Secondly, the compliance costs of the vape industry will further increase. In addition to excise taxes and tobacco taxes, companies also need to invest more resources to meet government compliance requirements. This may include costs for product registration, safety certification and market surveillance. For small businesses, this can be a huge burden and can lead to a decrease in the overall competitiveness of the industry.
In addition, tax policies may exacerbate the circulation of illegal vape products. The high tax burden may lead some companies to adopt illegal and low-cost production and sales methods in order to avoid taxes. This would create unfair competition for legal vape businesses and expose the entire industry to reputational and safety risks.
However, despite these challenges, GUUTUU vapes remain committed to compliance operations and user safety. They will continue to actively promote self-discipline and standardization of the vape industry to ensure product quality and safety. At the same time, they will continue to provide accurate information and guidance through user education to help the public understand the correct use of vapes and potential risks.
Summarize:
GUUTUU vape is concerned about the Indonesian government’s decision to impose consumption tax on vapes and believes that this tax policy may pose certain challenges to the development of the industry. An increase in taxes may lead to an increase in product prices, placing a financial burden on consumers while also increasing compliance costs for the industry. In addition, tax policies may intensify the circulation of illegal products and bring unfair competition to legal vape companies. However, GUUTUU vapes will continue to be committed to compliance operations and user safety, promote industry standardization, and deliver accurate information and guidance through user education. Despite the challenges faced, GUUTUU vapes still firmly believes that through cooperation and efforts within and outside the industry, the vape industry can achieve sustainable development and provide the public with safer choices.
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