The Indonesian government targets an 11.92% increase in excise revenue in the 2022 State Budget.

The Indonesian government targets excise tax revenue of Rp 203.92 trillion in the 2022 State Budget (RAPBN). This figure represents an 11.92% increase from the 2021 APBN outlook of Rp 182.2 trillion.

Excise tax remains a significant component of state revenue. In the 2022 RAPBN, excise tax revenue is projected to account for 13.53% of total tax revenue, which is targeted at Rp 1,506.92 trillion. Compared to total state revenue of Rp 1,804.08 trillion, excise tax constitutes 11.08%.

Excise tax revenue grew at an average rate of 6.1% during the 2017-2019 period. This growth was driven by increased revenue from tobacco excise taxes through tariff hikes. The increase was also supported by a program to crack down on high-risk excise tax evasion through the eradication of illegal cigarettes.

The implementation of social restrictions to curb the spread of the Covid-19 coronavirus resulted in excise tax revenue growth of only 2.3% in 2020. Specifically, tobacco excise tax grew by 3.3%, while ethyl alcohol excise tax surged by 97.3%.

The surge in ethyl alcohol excise tax revenue was driven by increased demand for disinfectant raw materials in efforts to handle the coronavirus pandemic. Meanwhile, excise tax revenue from alcoholic beverages experienced a significant contraction due to the impact of social restrictions on the tourism sector.