Top Page | English | 简体中文 | 繁體中文 | 한국어 | 日本語
Monday, 15 February 2016, 21:00 HKT/SGT
Indonesian Tobacco Import Restrictions May Cause Havoc

JAKARTA, Feb 15, 2016 - (ACN Newswire) - The discussion currently surrounding the Draft Bill on Tobacco Affairs (RUU Pertembakauan) is seen as a fateful matter for the cigarette industry by multiple parties. The notion of a 20% import limitation on the total requirements of the tobacco industry, a 60% import duty for imported tobacco, and a triple excise on cigarettes that utilize imported tobacco is seen as lethal by the industry.

Director of Beverages, Tobacco Products and Materials Industry Ministry, Willem Petrus Riwu, stated that solutions to addressing this matter must be formulated soon. Willem also added chapters on the Tobacco Draft Bill which address import limitations must be thoughtfully considered. "We must evaluate such needs from the perspective of the industry."

Currently, according to Willem, many parties have yet to understand the actual condition of the domestic tobacco supply. "As a matter of fact, the total availability of national tobacco is not yet able to fulfill the needs of the industry. We must not neglect such a situation, but rather try to find a proper solution," he then added.

The Chairman of the Association of Indonesian Cigarette Manufacturers (Gappri), Ismanu Soemiran, explained that currently domestic tobacco is only able to fulfill less than 50% of the total cigarette industry's needs. Hence, the Parliament's agenda of limiting tobacco imports through the Tobacco Draft Law will significantly raise the cost of import duty and will certainly hurt the industry.

In line with Gappri, the Chairman of the Indonesian White Cigarette Manufacturers Association (Gaprindo), Muhaimin Moeftie, asked the government to pay closer attention to some points while discussing the Draft Bill.

The discourse which restricts imports of tobacco is one important thing to note. "The current production of cigarettes today is more than 300 billion, thus requiring more than 300 thousand tons of tobacco per year. On the other hand, the production of national tobacco is still less than 200 thousand tons per year. Which suggests, if the government wanted to limit the use of imported tobacco, such a plan will require a long transition period, and a concrete effort to improve the productivity of national tobacco production," he said.

According to Moeftie, during this transitional period the government must conduct series of efforts to ensure the domestic supply's ability in meeting the needs of the industry. Aside from the quantity, Moeftie also highlights quality problems, particularly in terms of the variety of tobacco available in Indonesia.

"Production of cigarettes does not merely require a singular type of tobacco; there are several types which are utilized. The problem is, not all kinds of tobacco can be optimally cultivated in Indonesia," he explained.

The plan for the imposition of triple excise duty for cigarettes which use imported tobacco was also seen unwise, and could kill the industry. "Keep in mind, this time almost all players in the industry use imported tobacco, both small and large factories," said Moeftie.

He was concerned, if these regulations were to be implemented, the industry, especially small industry, may be affected.

Public Relations Manager
Mobile: +62 81232885533

Feb 15, 2016 21:00 HKT/SGT
Topic: Press release summary
Sectors: Daily News
From the Asia Corporate News Network

Copyright © 2018 ACN Newswire. All rights reserved. A division of Asia Corporate News Network.

Latest Press Releases
GoSecurity announces integration plans for Blockpass KYC Solution  
Dec 10, 2018 21:00 HKT/SGT
Disposal of Inn Hotel Hong Kong by Emperor International at HK$1.1 Billion with Gain of Approximately HK$746 Million  
Dec 10, 2018 19:57 HKT/SGT
New Technologies Enhance Franchise Management  
Dec 10, 2018 15:30 HKT/SGT
Hong Kong's Chief Executive Honors Two Outstanding Scholars for Their Contributions to Education Reform at Yidan Prize Award Presentation Ceremony  
Dec 10, 2018 15:00 HKT/SGT
MHPS: Midwest Utility Orders Game-Changing SmartER GAC Gas Turbine  
Dec 10, 2018 14:42 HKT/SGT
TOYOTA GAZOO Racing to Exhibit GR Supra Super GT Concept at the Tokyo Auto Salon  
Dec 10, 2018 10:30 HKT/SGT
MHPS Receives Trainees from Vietnam Electricity (EVN)  
Dec 10, 2018 10:05 HKT/SGT
Realized Eruptive Growth in Four Years, Wanka Online sprints towards HK Listing Market  
Dec 10, 2018 08:50 HKT/SGT
Hitachi Automotive Systems to Transfer its Commercial Vehicle Steering Business to Knorr-Bremse  
Dec 10, 2018 08:39 HKT/SGT
Xinyi Energy Holdings Limited Announces Details of Proposed Listing on the Main Board of The Stock Exchange of Hong Kong Limited  
Dec 10, 2018 08:30 HKT/SGT
More Press release >>
 News Alerts
Copyright © 2018 ACN Newswire - Asia Corporate News Network
Home | About us | Services | Partners | Events | Login | Contact us | Privacy Policy | Terms of Use | RSS
US: +1 800 291 0906 | Beijing: +86 10 8405 3688 | Hong Kong: +852 2217 2912 | Singapore: +65 6304 8926 | Tokyo: +81 3 6721 7212

Connect With us: