The Impact of Increase of Cigarette Expension on Net Income in Income Statements

Abstract

The Indonesian government decided to increase the excise tax on tobacco products by 23% starting January 1, 2020. The performance of cigarette manufacturers was affected by government policies that increased cigarette excise or tobacco product excise which had an impact on the growth of cigarette issuers' income. This study aims to analyze the impact of the increase in cigarette excise on net income at PT. Gudang Garam Tbk. This type of research in this research is descriptive with a qualitative approach. The results of this research show that the increase in cigarette excise has an effect on net income at PT. Gudang Garam Tbk. PT Gudang Garam Tbk's Profit and Loss Report shows an increase in all aspects, both sales, gross profit and net income even though the government policy regarding the increase in cigarette excise rates has been implemented as of January 1, 2020. This reflects that PT Gudang Garam has implemented a good strategy in maintaining profitability of the company. Business of PT. Gudang Garam Tbk, is still supported by sales of the machine-made kretek cigarette (SKM) segment, which contributed 91.25 percent to the company's revenue.