Increase of Alcoholic Beverage Excise Rates

Starting from January 1, 2024, the Minister of Finance (the “MOF”) has implemented an increment on excise rates for alcoholic beverages which was announced in the MOF Regulation No. 160 of 2023 dated December 28, 2023 on Excise Rates for Ethyl Alcohol (“EA”), Drinks Containing Ethyl Alcohol (“MMEA”), and Concentrates Containing Ethyl Alcohol (“KMEA”) (the regulation hereinafter referred to as “Regulation 160/2023”).

We set out below certain key points of Regulation 160/2023.

Background

The increase in the excise rates as set out in Regulation 160/2023 applies for MMEA, either which are produced locally or imported. Director of Communication and User Guidance for Customs and Excise Services at the Ministry of Finance, Nirwala Dwi Heryanto, said that the increase in the MMEA excise rate aims to reduce the prevalence of alcoholic beverage consumption, especially among minors who are increasingly growing. Based on his records, the prevalence of MMEA consumption aged over 10 (ten) years continues to grow from 3% (three percent) in 2007 to 3.3% (three point three percent) in 2018. In addition, the average growth in MMEA production in the last 10 (ten) years is 2.4% (two point four percent).

Drinks Containing Ethyl Alcohol (MMEA)

As a comparison, we set out below the excise rates for MMEA under the previous regulation, namely MOF Regulation No. 158/PMK.010/2018 dated December 13, 2018 on Excise Rates for EA, MMEA, and KMEA (the “Regulation 158/2018”), and under Regulation 160/2023.

Ethyl Alcohol (EA) and Concentrates Containing Ethyl Alcohol (KMEA)

As a note, the excise rates for EA and KMEA under Regulation 160/2023 remain the same as Regulation 158/2018. However, Regulation 160/2023 differentiates the form for the excise rates of KMEA in the form of liquid and solid forms. Below are the excise rates for EA and KMEA.

  • Excise Rates for Ethyl Alcohol (EA)

  • Excise Rates for Concentrates Containing Ethyl Alcohol (KMEA)

 

 

AKSET

Please contact Inka Kirana (ikirana@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com),  or Ayu Nandini Prameswari (aprameswari@aksetlaw.com) for further information.

 

 

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