Indonesia's new vape tax officially came into effect earlier this month, against the advice of experts in the field of tobacco harm reduction.
The new 10% tax was added on top of the high 57% excise tax imposed on e-cigarette liquid in 2018.
The new 10% tax will come into effect on January 1, 2024, in addition to the existing excise tax. Indonesia imposed a high excise tax of 57% on e-cigarette liquids in 2018. The country struggles with one of the highest smoking rates globally, and local authorities say the tax is motivated by e-cigarette consumption, which they intend to level the playing field with traditional cigarettes.
However, while Indonesia faces a significant challenge in combating its high smoking rates , peer-reviewed studies have consistently shown that vaping products do play an important role in reducing traditional cigarette consumption. A 2021 study published in the international journal “Environmental Research and Public Health” reiterated that vaping has the potential to serve as a harm reduction tool. The study found that smokers who switched to vaping had reduced exposure to toxic chemicals found in traditional cigarettes, potentially reducing health risks.
Taxes do not reflect the relative safety of vaping
While a 2019 report by the National Academies of Sciences, Engineering, and Medicine in the US reiterated that while not without risks, vaping is less harmful than smoking and that switching from smoking to vaping “reduces users’ exposure to many toxicants and carcinogens found in combustible tobacco.” If these findings were applied to the Indonesian context, where smoking rates remain high, promoting vaping as a less harmful alternative to help smokers transition away from conventional cigarettes would be seen as an excellent public health strategy.
Given the situation in Indonesia, exploring harm reduction strategies like vaping is a potential avenue for positive public health outcomes, as long as strict regulations are put in place to prevent young people from starting to smoke. This argument is not only supported by countless studies , but is also tirelessly repeated by smoking cessation experts around the world. Sadly, it seems that the Indonesian authorities will ignore it.
How have taxes affected sales?
Discussing the tax with local retailers in Bali, the Indonesian tourist island where mainland regulations tend to be less stringent, locals have adapted to the new prices by buying products illegally imported from neighboring countries. “The new tax hasn’t really affected foreign sales,” said vape shop owner Gede, who asked that his shop not be named. “Maybe because they don’t know how to get cheaper products.”
“For locals, it’s a different story. They know who they can trust to buy cheaper products. So they don’t buy from regular stores anymore.” A second retailer, Nyoman Wirdana, made similar comments. He added that some vape shops have a special stock of illegal products at the back of their stores, which they only give to customers they trust. “These products are not dangerous, they are just imported from countries with no taxes,” he told Vaping Post.
Such patterns of behavior in response to bans or price hikes have been observed worldwide. This has consistently prompted experts in the field to advocate for regulations and fair pricing, to ensure safe and accessible products through reliable and non-criminal sources.
