Legalizing vaping in Indonesia will open up a dynamic and competitive market.
Have you ever thought that Coca Cola would never have had the chance to become the most popular soft drink in the world if their competitor, from the beginning, was not Pepsi. Apple, Samsung or phone companies in general are the same, they are both competitors and also the driving force for each other's development.
This theory applies to all industries and the vape market in Indonesia is no exception. Since the ban was lifted and legalized, Indonesia has created an open, fair and healthy vape market for the country's vape industry to develop freely. Many new brands have been founded, new technologies have been applied and most notably, unique e-liquid recipes. The flavors of e-juices originating from Indonesia have their own unique qualities, completely different from e-liquids from China or the US (which are the most popular producers of e-liquids in the world).
Competition and innovation
Since late 2018, the Indonesian government has made many moves to "open the door" for the vape industry to develop freely in this country. However, at that time, the tax rate for the production of electronic cigarettes was still quite high, so there were very few businesses that produced and traded domestically. Instead, small and medium-sized retailers chose to (illegally) import electronic cigarettes through unofficial channels, and for that reason, the quality and price of vapes in Indonesia in the period from 2018-2022 were extremely "unstable", quite similar to Vietnam when the vape movement first entered our country.
Things took a 180-degree turn in 2023 when the government decided to reduce taxes and encourage small businesses to sell and produce e-cigarettes, heated tobacco products, and other tobacco alternatives within Indonesia. This move not only shows the government’s determination to tackle traditional cigarette smoking, but also opens up a very vibrant vape market, where vape businesses are developing and innovating products on a daily basis.
Abundant supply
Obviously, compared to importing through unofficial channels, independent production will ensure an abundant supply of goods, ready to meet all needs/requests from consumers. Vapers in Indonesia now no longer have to worry about running out of OCC or other important accessories to maintain their vape kits. Not only that, manufacturers can also fine-tune their products to create an experience that is “suitable” to the taste of Indonesians in particular and Asians in general, ready for export to neighboring countries.
Reduce costs
Reducing taxes and encouraging competition among e-cigarette companies will inevitably lead to a reduction in prices to compete for market share with other companies. Lower prices for vapes also mean that this product will reach more people, especially low-income groups.
Easy to control product quality
Prohibition or high taxes often lead to illegal business activities to avoid legal control. Opening up and reducing taxes not only helps the Indonesian government easily trace the origin of goods and ensure the quality of e-cigarette products sold in the country. Above all, it helps save a significant amount of money spent on "cleaning up" the black market and smuggling of e-cigarettes that have been rampant in the country since late 2019-2020.
Although in the short term it will reduce the revenue from taxing each part of e-cigarettes separately. But in the long term, with the development of the market and the increase in the number of users, the Indonesian government will get more from taxing and licensing e-cigarette-related businesses.
Reduce the rate of smoking traditional cigarettes
Many studies have shown that e-cigarettes can be a less harmful alternative to traditional cigarettes. Legalizing and encouraging the use of e-cigarettes has been proven by many countries such as the UK, Australia and the Philippines to help reduce the rate of traditional cigarette smoking, thereby reducing the health and economic burden caused by tobacco-related diseases.
Conclude
The legalization and tax reduction of e-cigarettes in Indonesia is an important step towards creating a healthy and competitive market that is growing rapidly. This will not only bring economic benefits but also contribute to improving public health. The Indonesian government needs to consider and implement appropriate policies to promote the development of the e-cigarette industry while ensuring the protection of the interests of consumers and society.
The above article aims to provide an overview of the potential benefits of legalizing and reducing taxes on e-cigarettes in Indonesia. Hopefully, after this campaign, Indonesia will be able to create a potential vape market, healthy competition, bringing benefits to both the economy and public health.
Stay safe, vape on!
