1. Realizing that Law No. 11/1995 has not accommodated matters to empower the role of excise as a source of state revenue, Law No. 11/1995 needs to be amended in line with socio economic developments and government policies.
2. Excise as a state levy imposed on certain goods having characteristics and nature suitable to the law constitutes state revenue to realize welfare justice and equilibrium.
3. The imposition of excise needs affirmation in the definition so as to be able to provide legal basis and certainty in a bid to add or expand objects of excise by observing aspirations and capability of communities.
4. To maximize the state revenue from the excise sector besides affirming the definition of excise, it is also necessary to improve the excise collection administrative system and enhance law enforcement as well as affirm the fostering of personnel in the framework of good governance. In relation thereto, substances of the amendment to this law also cover:
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Letter a
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Letters b and c
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Letter d
It is necessary to impose state levy on their use in the framework of justice and equilibrium means excise can be imposed on goods categorized as luxury and/or highly valuable goods but they are not basic need so as to continue preserving the equilibrium of imposition of levy on high income and low income consumers.
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The enforcement is executed by the Directorate General of Customs and Excise.
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Letter a
Ethyl alcohol or ethanol means liquid, clear and colorless material, which constitutes organic compound with chemical formula C2H5OH, obtained by means of fermentation and/or sublimation or chemical synthesis.
Letter b
Ethyl alcoholic beverages mean ail liquid material commonly called beverages containing ethyl alcohol, which is obtained by means of fermentation, sublimation or other means, such as beer, shandy, wine, gin, whisky and the like.
Ethyl alcoholic concentrates mean concentrates containing ethyl alcohol used as raw material or auxiliary materials in the production of ethyl alcoholic beverages.
Letter c
Cigarette means tobacco product made of sliced tobacco, which is wrapped by paper by means of rolling, for use, without observing substitute material or auxiliary material used in the production.
Cigarette consists of clove-flavored cigarette, pure tobacco cigarette and cigarette containing resin.
Clove flavored cigarette is a cigarette mixed by clove or part thereof, original or artificial, in the production without observing the quantity.
Pure tobacco cigarette is a cigarette not mixed by clove or resin in the production.
Clove flavored and pure tobacco cigarettes consist of cigarettes made by machine or other ways.
Mechanically rolled clove-flavored and pure-tobacco cigarettes are clove-flavored and pure-tobacco cigarettes which in the production start from the rolling, installing of filter and packing in package for retail to affixing of excise tapes, by using machine partly or wholly.
Clove-flavored and pure-tobacco cigarettes produced by other ways are clove-flavored and pure-tobacco cigarettes which does not use machine in the production starts from the rolling, installing of filter and packing in package for retail to affixing of excise tapes.
Cigarette containing resin is cigarette which is mixed by pure or man-made resin in the production without observing the quantity.
Cigar is a tobacco product made of sheet of tobacco leafs sliced or not, by means of rolling in such a way with tobacco leaf for use, without observing substitute or auxiliary materials in the production.
Leaf cigarette means tobacco product made of palm leaf, corn leaf or the like, by means of rolling, for use, without observing substitute or auxiliary materials used in the production.
Other processed tobacco products are tobacco products made of tobacco leaf other than those mentioned in this letter, which is produced by other ways in accordance with developments of technology and consumer taste without observing substitute or auxiliary materials used in the production.
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Reduction or addition to kinds of excisable goods is conveyed by the government to organ of the House of Representatives in charge of financial affairs to obtain approval and be included into Bill on the State Budget of Revenue and Expenditure.
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Letter a
Stipulation of the maximum tariff as high as 275% (two hundred and seventy five percent) of the factory price or 57% (fifty seven percent) of the retail price is based on consideration that if the distribution or use of excisable goods affecting the health negatively due to their characteristics or nature needs to be restricted, the restriction can be realized through tariff instrument so that the excisable goods are liable to the maximum tariff.
Letter b
Stipulation of the maximum tariff as high as 275% (two hundred and seventy five percent) of the custom value or 57% (fifty seven percent) of the retail price is based on consideration that if the import, distribution or use of excisable goods affecting the health negatively due to their characteristics or nature needs to be restricted strictly, the restriction can be realized through tariff instrument so that the excisable goods are liable to the maximum tariff.
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Letter a
Stipulation of the maximum tariff as high as 1,150% (one thousand and one hundred fifty percent) of the factory price or 80% (fifty seven percent) of the retail price is based on consideration that if the distribution or use of excisable goods affecting the health, environment and social order negatively due to their characteristics or nature needs to be restricted, the restriction can be realized through tariff instrument so that the excisable goods are liable to the maximum tariff. In addition, the maximum tariff also can be imposed in the framework of justice and equilibrium, such as goods consuming by high income communities.
Letter b
Stipulation of the maximum tariff as high as 1,150% (one thousand and one hundred fifty percent) of the custom value or 80% (eighty percent) of the retail price is based on consideration that if the import, distribution or use of excisable goods affecting the health, environment and social order negatively due to their characteristics or nature needs to be restricted strictly, the restriction can be realized through tariff instrument so that the excisable goods are liable to the maximum tariff. In addition, the maximum tariff also can be imposed in the framework of justice and equilibrium, such as goods consuming by high income communities.
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Any change in the tariff of excise as described in this paragraph can be in the form of change in the percentage of cost price (advalorum) to become the amount in the rupiah for every unit of excisable goods (specific) or conversely. It also can be in the form of combination of the both systems. The change in the tariff has goals, among others, in the interest of the state revenue, restriction of consumption of excisable goods and facilitation of the collection or supervision over excisable goods.
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DPR RI means the Commission in charge of financial affairs.
Policy alternative means policy on tariff of excise on tobacco produced in Indonesia.
The approval of DPR RI in this paragraph aims at among others, protecting or favoring labor intensive tobacco product industries whose production uses methods other than machines.
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The factory selling price means the factory-based delivery price to distributors or consumers, wherein excise has not been included.
Retail price means the price stipulated as the basis for calculation of excise,
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The customs and import duty value means the value of customs and import duty as meant in the customs law.
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