Excise revenue may exceed target

The Jakarta Post, Jakarta

The government said on Tuesday that excise revenue for this year was likely to exceed the revised target of Rp 26.1 trillion (about US$3 billion).

Director General of Customs and Excise Eddy Abdurrahman said that excise revenue was expected to exceed the target by Rp 200 billion at Rp 26.3 trillion.

"We have predicted that excise revenue until the end of this year will be higher than initially planned," Eddy said on the sidelines of a hearing with House of Representatives Commission IX for finance.

He said excise revenue would exceeded the target because the government had recently revised down the initial target from Rp 27.9 trillion following protests by cigarette producers.

Cigarette producers were angry about government moves to raise the cigarette excise tariff during the past couple of years, which they said contributed to declining sales as the higher cost was passed on to consumers.

Consumers, on the other hand, were unable to cope with rising cigarette prices because of weakening purchasing power following an increase in electricity rates and fuel prices.

Because of this the cigarette output is forecasted at 186 billion sticks this year, down from 204 billion in 2002.

The government trimmed its excise target for this year when it saw the target was no longer realistic given declining cigarette sales.

Some 90 percent of excise revenue comes from the cigarette industry, with the liquor industry contributing the remainder.

As of the end of October, the directorate general of customs and excise had collected about Rp 21.1 trillion in excise revenue and Rp 9.1 trillion in import duties.

The government has set a Rp 27.7 trillion excise revenue target for 2004.