Editorial Board (The Jakarta Post)
Mon 18 October 2021
The Harmonized Tax Law amends the Customs and Excise Law of 2007 to allow the government to change the types of products subject to excise tax, which were previously limited to tobacco products, alcoholic beverages and ethyl alcohol.
True, the government will most likely add to the list and rate, as the excise tax accounts for over 45 percent of total tax revenue and the government is strapped for resources to meet the budget deficit, which the law says , is to be reduced from around 5% of gross domestic product (GDP) by 2022 to 3% of GDP in 2023.
The government has set the 2022 excise duty revenue target at 204 trillion rupees ($ 14.50 billion), 13 percent more than the estimated 180 trillion rupees this year. This increase is indeed quite large compared to the average annual increase of around 5% over the past five years.
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