Excise tax enhance, weak buying energy for cigarette producers – Wed, December 16, 2020

Excise tax increase, weak purchasing power for cigarette manufacturers - Wed, December 16, 2020

The government’s decision to increase excise taxes on tobacco and tobacco products in 2021 is likely to have a negative impact on cigarette manufacturers, according to analysts, as purchasing power has weakened as a result of the pandemic. The government will raise excise taxes on cigarettes by an average of 12.5 percent in February next year. “Most of the companies’ sales come from machine-made clove cigarettes, including those from [publicly listed cigarette makers] PT HM Sampoerna and PT Gudang Garam, ”wrote Christine Natasya, analyst at Mirae Asset Sekuritas, in a research note on Thursday. Finance Minister Sri Mulyani Indrawati announced on Thursday that the tariff hike will only apply to machine-made clove cigarettes and machine-made white cigarettes. The excise duty on hand-rolled cigarettes would remain unchanged in order to …

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