The government will adjust the excise rate on alcoholic drinks, in light of the newly endorsed law on value-added tax and luxury tax that eliminates the luxury tax for the commodity.
“The rate will remain quite high because we want to control the consumption [of alcoholic drinks],” Anggito Abimanyu, the Finance Ministry's head of fiscal policy, said Thursday.
“But we don’t want smuggling [to increase]."
The law takes effect on April 1, 2010, pending government and Finance Ministry regulations stipulating the implementation of the law.
Customs and Excise Director General Anwar Suprijadi said that to increase the excise on alcoholic drinks, the government would need to talk to shareholders, including hotel and restaurant owners.
“We want to raise it because the excise target [in 2010] is increasing,” he said.
“But it will depend on the government's policy to either make it more expensive or cheaper.”
Alcoholic drinks contribute about 1 percent of total excise, he said.