`Kretek' makers oppose changes in tax system<\/p>\n
JAKARTA (JP): Makers of kretek (clove-blended cigarettes)
\nwarned the government on Wednesday that its plan to impose excise
\non the basis of nicotine and tar content rather than production
\nvolume would lead to bankruptcies and mass unemployment.<\/p>\n
The government is expected to make a new ruling in calculating
\nthe excise tax on cigarettes this week before the start of the
\nnew fiscal year on April 1.<\/p>\n
One proposal being considered calls for the imposition of a
\nhigher tax rate for cigarettes containing more than 20 milligrams
\nof tar and 1.5 milligrams of nicotine.<\/p>\n
The Association of Indonesian Cigarette Producers (GAPPRI),
\nrepresenting clove cigarette companies, said that its members,
\nwhich use locally grown tobacco, would find it impossible to
\nadhere to the limits.<\/p>\n
\"It is just as impossible as making a tetoron (synthetic)
\ndress out of cotton,\" GAPPRI chairman Ismanu Said said during a
\nhearing with House of Representatives Commission V on
\ncommunications, transportation, public works, tourism and public
\nhousing.<\/p>\n
The director and chief financial officer of the giant kretek
\nproducer PT Hanjaya Mandala Sampoerna, Eka Dharmajanto Kasih,
\nobserved that the proposed system would favor multinational
\nmakers of regular cigarettes at the expense of local and labor-
\nintensive producers.<\/p>\n
GAPPRI executives have said that clove cigarette producers,
\nwhich are for the most part small and medium enterprises, do not
\nhave the technology to measure tar and nicotine contents.<\/p>\n
The association, which has 159 members, is a powerful lobby
\ngroup which in the past has successfully opposed measures
\nproposed by anti-smoking organizations.<\/p>\n
The association says the clove cigarette industry employs 6.46
\nmillion workers and provides for as many as 20 million people, or
\nabout 10 percent of the country's population.<\/p>\n
The industry is expected to contribute the bulk of the Rp 9.4
\ntrillion ($1.25 billion) in excise taxes estimated for the fiscal
\nyear ending March 31. Clove cigarette exports also bring in about
\n$55 million in revenue, the association said. (10)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/kretek-makers-oppose-changes-in-tax-system-1447893297",
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"sponsor": "Okusi Associates",
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