The Indonesian Ministry of Finance has enacted a new regulation that determines the cigarette tax rate of 10% (ten percent) of cigarette excise on electronic cigarettes, or e-cigarettes, beginning January 1, 2024.

Electronic cigarettes are officially listed as taxable tobacco goods under Minister of Finance Regulation No. 143/PMK/2023 on the Procedures for Collecting, Withholding, and Remitting Cigarette Tax ("Regulation 143/2023"), which was released on December 15, 2023.

Furthermore, the Ministry of Finance has previously issued Regulation No. 192/2021 as lastly amended by Regulation No. 191/2022, which regulates Excise Tariffs on Tobacco Products. Regulation 143/2023, which goes into effect on January 1, 2024, represents an average 10% rise in the tobacco tax rates, affecting the retail pricing of various tobacco products.

The rule attempted to provide an equal playing field for all tobacco products, emphasizing that both taxes and excise duties have been imposed on traditional cigarettes since 2014.