The government is currently studying the plastic bags excise tax plan, particularly the exact tariff that will be imposed. A government official said the tariff will not exceed Rp200 per plastic bag. Meanwhile, the government is also ready to offer fiscal incentives for the import of industrial capital goods for the production of environment-friendly plastic bags. Indonesian Industry Minister Airlangga Hartarto said Indonesian plastic bags producers already have a relatively low profit margin and therefore this new proposed excise tax will impact significantly on these companies’ corporate earnings. The Indonesian government targets to collect Rp155.4 trillion from excise taxes in the proposed 2018 state budget, which includes income from the proposed plastic bags excise tax. However, the bulk will still originate from tobacco products.
