The government's decision to increase excise taxes on tobacco and tobacco products in 2021 is likely to have a negative impact on cigarette manufacturers, according to analysts, as purchasing power has weakened as a result of the pandemic.
The government will raise excise taxes on cigarettes by an average of 12.5 percent in February next year.
"The majority of the companies' sales come from machine-made clove cigarettes, including those from [publicly traded cigarette makers] PT HM Sampoerna and PT Gudang Garam," Mirae Asset Sekuritas analyst Christine Natasya wrote in a research report on Thursday.
Finance Minister Sri Mulyani Indrawati announced on Thursday that the tariff hike will only apply to machine-made clove cigarettes and machine-made white cigarettes. The excise duty on hand-rolled cigarettes would remain unchanged in order to …
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