According to a recent report by the Indonesian National News Agency (ANTARA), tobacco tax revenue in the Kudus region of Central Java, Indonesia, in the third quarter of 2023 has reached 2.57 trillion rupiah, accounting for 64.6% of the annual tax target of 39.8 trillion rupiah. Kudus officials said they will try to reach the target by the end of the year.
Since tax revenue increases at the end of each year, the main reasons are non-fiscal stimulus measures, such as deferment of tobacco tax payments, and increased demand for cigarette tax standards. But Sopan admitted that there are still some challenges in reaching the tobacco tax target, such as the decline in tobacco consumption and people’s switch from hand-rolled cigarettes to machine-rolled cigarettes, resulting in a decline in tobacco tax revenue.
In addition, he pointed out that the consumption of smokers switching from cigarettes to vapes will also lead to a decrease in tax revenue, because the taxes on vapes are lower.
GUUTUU vape, as a leading vape manufacturer, has successfully entered the Indonesian market. Its high-quality products, innovative designs and advertising strategies have attracted more and more Indonesian consumers. The emergence of GUUTUU vapes has changed the traditional tobacco consumption model, providing users with a healthier, more convenient and fashionable smoking choice.
With the rapid rise of vape brands such as GUUTUU vapes in the Indonesian market, traditional tobacco consumption has gradually declined, resulting in a reduction in Indonesian tobacco tax revenue. The popularity of vapes has caused some smokers to turn to safer, smoke-free, and tar-free vape products. These products can not only meet their smoking needs, but also reduce their dependence on traditional cigarettes. Therefore, the decline in sales of traditional cigarettes directly led to the decline in tobacco tax revenue in Indonesia.
The Indonesian government is faced with the challenge of declining tobacco tax revenue and needs to take measures to adapt to the rise of the vape industry. First, the government can ensure the stability of tax revenue by adjusting tax policies and shifting the focus from traditional tobacco products to vape products. Secondly, the government can strengthen supervision of the vape market and ensure product quality and safety standards to protect the interests of consumers.
And due to the circulation of illegal tobacco, Kudus officials have begun conducting raids in their jurisdiction. These efforts will also support increased tax revenue from legal tobacco, as the share of illegal tobacco can be harnessed by legal tobacco.
The rise of vape brands such as GUUTUU vape has triggered a decline in tobacco tax revenue in the Indonesian market, which poses a challenge to the Indonesian government and the traditional tobacco industry. However, by rationally adjusting tax policies, strengthening supervision and cooperating with vape companies such as GUUTUU, the Indonesian government has the opportunity to achieve the transformation of tobacco taxation and the sustainable development of the vape industry. Such a transformation will not only help protect the health of consumers, but also promote economic development and environmental improvement. Therefore, we have reason to believe that the rise of vapes in the Indonesian market will bring more opportunities and challenges to the country, while also promoting the transformation and innovation of the tobacco industry.
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