Excise Tariffs for Tobacco Products Re-Adjusted

The Ministry of Finance(“Ministry”)has issued RegulationNo. 147/PMK.010/2016 (“Third Amendment”) on the Third Amendmentto Ministry Regulation No. 179/PMK.011/2012 on Excise Tariffs for Tobacco Products(“Regulation 179/2012”). [1] With the ultimate goal of controlling the consumption of tobacco products across Indonesia while accommodating targets for their excise contribution to state revenue in 2017, the Third Amendment updates the excise tariffs which are levied on tobacco products. [2] Prior to the issuance of the Third Amendment, Regulation 179/2012 had been amended twice previously by Ministry Regulation No. 205/PMK.011/2014 (“First Amendment”)and by Ministry Regulation No. 198/PMK.010/2015 (“Second Amendment”) [3] ,both of which addressed the same matters.The Third Amendment is of relevance to all producers, importers and vendors of tobacco products across Indonesia.New Production Limits for Tobacco ProducersThe Third Amendment sets new production limits for tobacco producers, based on the types of tobacco product and the producers concerned, and these limits are specified under Appendix I to the Third Amendment. Production limits were initially specified in Appendix I to Regulation 179/2012 and were most recently amended under Appendix I to the First Amendment. However, the Second Amendment no longer incorporated any such limits under its framework.A comparison of production limits for tobacco producers between the Third Amendment and the First Amendment are as detailed in the following table: [4]