The Indonesian government wants to turn vapers into smokers to protect cigarette tax income, and they know just how to do it. The country is planning on imposing a 57 percent tax on vapes later this year.
The Southeast Asian island country is the fourth most populous country in the world (more than 260 million people), and with 67 percent of male residents over 15 smoking cigarettes, the government is accustomed to the financial benefits of cigarette taxes.
The country takes in about $10.5 billion (U.S.) in tobacco taxes annually, according to The Straits Times. The vaping industry only contributes about $7.5 million, and that is mostly in sales taxes. The difference between the two is the whole story.
Indonesian authorities aren’t shy about the reason they’ve proposed the punishing vape tax. The country’s finance minister told the Jakarta Globe last year that the main reason for the excise penalty on vapes was to limit use.
In case that wasn’t clear enough, trade minister Enggartiasto Lukita told a local newspaper that vapers should just smoke instead. Explaining that tobacco farmers would be hurt by a decline in smoking, Lukita said, “We should turn vapers into conventional cigarette smokers.”
According to the Washington Post, businesses selling vapes will be required to get multiple licenses — a process that could take years.
“These are standards we’ll never be able to meet,” Rhomedal Aquino, a spokesperson for Asosiasi Personal Vaporizer Indonesia (Indonesian Personal Vaporizer Association), told the Post. “It will really hurt both small businesses and consumers in our sector.”
Meanwhile, cigarette companies have no complaints at all. Cigarettes sell for just $2 a pack, and business is good.