An assessment of tobacco excise administration practices in Indonesia

Listed in:

• Global implementation
• Tobacco taxes: Design and administration

Abstract

The global economic slowdown has unquestionably brought down the performance of the Indonesian economy. This, in turn, presented an extraordinary challenge to the Directorate General of Customs and Excise (DGCE) in collecting excise revenues. In the last few decades, tobacco has contributed the largest part of excise revenue. Accordingly, it is inevitable for the DGCE to implement best practices in administrating tobacco excise to optimize revenue collection, while at the same time, enhance public health. Conveniently, The World Health Organization (WHO) provides a series of extensive best practices in that particular field. This study is set as a comparative research which assessed tobacco excise administration practices performed by the DGCE and compared them against best practices set by the WHO. This study revealed that, in general, the DGCE has performed well in most of these best practices. However, there are some WHO’s best practices which are unsuitable to be implemented in Indonesia. Unique fiscal, economic, political and social circumstances in Indonesia need to be taken into account in determining and establishing tobacco excise tax policy.