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Table 5 Government revenue loss due to illicit cigarettes (assuming no under-reporting) Indonesia, 2011 and 2013

From: Illicit cigarette consumption and government revenue loss in Indonesia

Category

Subcategory

2011

 

2013

 

Origin of Illicit Consumption (%)

Illicitly Produced

90

100

90

100

 

Smuggled

10

0

10

0

Illicit Cigarettes (billion sticks)

Illicitly Produced

27.4

30.5

20.6

22.9

 

Smuggled

3.0

0

2.3

0

Proportion of Domestic Consumption (%)

Machine Made Kreteks Cigarette

68.5%

68.5%

68.5%

68.5%

 

Machine Made White Cigarettes

6.0%

6.0%

6.0%

6.0%

 

Hand-Made Kreteks and White Cigarettes

25.5%

25.5%

25.5%

25.5%

Lowest Tax Tiers (Rp)

Machine Made Kreteks

170

170

245

245

 

Machine Made White Cigarettes

110

110

195

195

 

Hand-Made Kreteks and White Cigarettes

65

65

80

80

Highest Tax Tiers (Rp)

Machine Made Kreteks

325

325

375

375

 

Machine Made White Cigarettes

325

325

380

380

 

Hand-Made Kreteks and White Cigarettes

235

235

275

275

Estimated Revenue Loss Range (Rp)

Estimate, Lowest Tier (trillion Rp)

4.1

4.3

4.5

4.6

 

Estimate, Highest Tier (trillion Rp)

9.3

9.2

8.1

8.0

Estimated Revenue Loss Range (US$)

Estimate, Lowest Tier (million US$)

467.5

490.3

430.2

439.7

 

Estimate, Highest Tier (million US$)

1,060.4

1,049.0

774.3

764.7

Estimated Revenue Loss Range as Share of Tobacco Excise Taxes

Total Tobacco Excise Revenue (trillion Rp)

73.3

73.3

103.6

103.6

 

Share of Tobacco Excise Revenue, Lowest Tier (%)

5.6

5.9

4.3

4.4

 

Share of Tobacco Excise Revenue, Highest Tier (%)

12.7

12.6

7.8

7.7

  1. Source: Authors’ calculations.
  2. Official exchange rates were Rp 8770.4 per US$ in 2011 and 10,461.2 in 2013.