Tobacco tax revenue falls in Central Java as vape market expansion poses threat

According to Antaranews on October 13, data from the Customs and Excise Supervision and Service Office (KPPBC) in Central Java, Indonesia, showed that as of the third quarter of 2023, the province had achieved only 64.6% of its tax revenue target, collecting IDR 257 billion against a target of IDR 398 billion. Sandy Hendratmo Sopan, Head of Revenue Consulting and Information Services at KPPBC Central Java, said they will work to meet the expected target before year-end. However, he acknowledged that there are many difficulties in cigarette excise collection. Declining smoking volumes and a market shift toward vaping products and the illicit cigarette market have made the tax target difficult to achieve. Central Java has stepped up enforcement and expanded its coverage, but it still has to confront the growing illicit market.