Indonesia Looking To Impose Vape Tax

Southeastern Asian countries have some of the highest smoking rates in the entire world, and many are looking to impose taxes on vapor products as the industry begins to cut into the revenue they've long enjoyed from tobacco. The most recent tax proposal comes from Indonesia, which is imposing a 57 percent hike in taxes on tobacco products. Vapor products are classified as tobacco products, therefore all vapor products are subject to the same taxes as tobacco. Going forward, that means any attempt to curb tobacco use will also implicitly punish vapers, even as vapor products have been used all over the world as a means to quit smoking cigarettes.

This practice of linking vapor to smoking and then taxing both has been widely used in the United States as a means to crack down on vapor products. Some of the more well-known and detrimental taxes are deployed at the state level, such as Pennsylvania’s 40 percent vapor tax that wiped out hundreds of vape shops. Similarly, taxes in Delaware have been passed and Hawaii and New Jersey have both proposed exorbitant vape taxes.

Sunaryo, an official with Indonesian Customs and Excise Office, said the e-liquid excise tax would be an expansion of the current excise tax rules for tobacco products, according to a report in Reuters. The tax would go into effect on July 1 and  would only apply to juices that contain traces of tobacco plants so that “consumers can be more protected,” Sunaryo said. It’s not clear what the consumer is being protected from.

Currently, there are about 300 professional e-liquid suppliers in Indonesia, providing various liquid products to more than 4,000 vape stores and 900,000 vapers, the customs office estimates. These vapers would have a much more difficult time having access to their favorite products, which are a better alternative for ex-smokers and have been used to quit combustible cigarettes. While these taxes are proposed under the auspice of curbing smoking, smoking has been curbed by the rise of vapor in the last decade.

In other parts of the Asian region, Hong Kong recently proposed a tax that would treat vapor products as no different from cigarettes. Announcing the move, Secretary for Food and Health Sophia Chan Siu-chee said: “Other than the health impact, I am worried that e-cigarettes and other new tobacco products will begin to become the smoking gateway [for youths],” according to a report in South China Morning Post.

These moves by Asian and South Asian governments are not so surprising, considering that other governments in the region have banned the use or sale of vapor altogether. Brunai, Cambodia, Singapore, Taiwan and Thailand have all imposed bans of varying degrees. Vapers can be fined up to $5,000 in Singapore, and in Taiwan, infamously, vapers can be jailed for vaping in public. While news in Hong Kong and Indonesia is not the best news for vapers around the world, it’s at least not the worst case scenario.