Evaluation of State Levies Policy on Cigarette and E-Cigarette

Abstract

Cigarettes and e-cigarettes are goods that have negative externalities. Due to the negative externalities, thegovernment needs to control the consumption of these two goods with the imposition of state levies. From thisbackground, this study discusses the evaluation of policies on state levies imposed on cigarettes and ecigarettes. This study aims to determine the structure of state levies imposed on cigarettes and e-cigarettes,and to know the differences in treatment of state levies on cigarettes and e-cigarettes. This research hasqualitative research with descriptive research types. The results of this study found that conventionalcigarettes consisted of three levies, that was Excise, VAT Tobacco Products, and Cigarette Tax, while ecigarettes consisted of two levies, namely Excise and VAT Tobacco Products. In addition, it was also foundthat the difference in treatment of state levies on conventional cigarettes and e-cigarettes, the first there was adifference in excise rates for the two goods, and the second there were differences in the treatment of cigarettetax imposition on the two goods. From the results of this study it is recommended that the government equalize the excise rates of the two goods and the Cigarette Tax treatment equation for the two goods.