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Indonesia Considers Expanding Excise Duties to Concert Tickets, Detergents, and More

Arnoldus Kristianus
July 24, 2024 | 3:11 pm
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Thousands of fans pack Bung Karno Stadium in Jakarta during the concert of the UK band Coldplay, Wednesday, Nov. 15, 2023. (Antara Photo/M Risyal Hidayat)
Thousands of fans pack Bung Karno Stadium in Jakarta during the concert of the UK band Coldplay, Wednesday, Nov. 15, 2023. (Antara Photo/M Risyal Hidayat)

Jakarta. The Directorate General of Customs and Excise (DJBC) under the Finance Ministry is considering imposing excise duties on concert tickets, luxury homes, fast food, tissue paper, MSG (monosodium glutamate), coal, and detergents.

Director of Technical and Excise Facilities at DJBC, Iyan Rubiyanto, said that the imposition of excise on these products is being considered due to their environmental and health impacts.

"Every day we use detergent. Have you ever thought about where it goes? Where is it disposed of? Fish used to be plentiful in the sewers, but now they're gone because of detergents," said Iyan on Tuesday.

Previously, the government had considered imposing excise on pirated compact discs (CDs) due to their widespread distribution.

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"Several years ago, we almost collected excise on pirated CDs. The intention was good, as only 10 percent of the CDs circulating in Indonesia were official, while 90 percent were pirated CDs sold on the streets," said Iyan.

According to Iyan, excise imposition on music concert tickets is also being considered due to the high enthusiasm of the public for attending music concerts, which is seen as having significant economic potential. For instance, tickets for the Coldplay World Tour sold out in Indonesia despite costing up to Rp 11 million ($677).

However, this plan is still in its very early stages. "The excise expansion policy is still a proposal from various parties, not yet in the study phase, and we also intend to gather input from academics," said the Director of Communication of DJBC, Nirwala Dwi Heryanto, on Wednesday.

Nirwala explained that the basic criteria for goods subject to excise are those with characteristics or consumption that need to be controlled, distribution that needs to be monitored, and use that can have a negative impact on society or the environment.

Based on Law Number 39 of 2007 concerning Amendments to Law Number 11 of 1995 concerning Excise, there are currently only three types of goods subject to excise: ethyl alcohol or ethanol, beverages containing ethyl alcohol, and tobacco products.

Nirwala elaborated on the discourse of optimizing state revenue through the extension of excise objects, noting that the process of designating a good as an excisable item is lengthy and involves multiple stages, including listening to public aspirations.

"The process starts with the submission of the excise expansion plan to the House of Representatives (DPR), the determination of revenue targets in the draft state budget with the DPR, and the drafting of government regulations as the legal framework for the excise expansion," said Nirwala.

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