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Economic Impact of Imposing Excise Tax on Plastic Bottles of Drinks

Author

Listed:
  • Eugenia Mardanugraha

    (Faculty of Economics and Business Universitas Indonesia)

Abstract

This research simulates the effect of imposing excise tax on plastic container of drinks towards economic performance of beverage industry in Indonesia and governmenta AZs tax revenue. The results showed that by imposing excise tax on plastic cups and plastic bottles the government would lose tax revenue from value added tax (PPN) and corporate income tax (PPh badan) more than they gain additional revenue from excise tax. Hence, imposing excise tax on drink containers should serve a clear purpose and an undeniable reason. This paper recommends the government to develop proper excise infrastructure to extend the goods or services to be taxed. This paper also recommends the required stages for extending the excise tax.

Suggested Citation

  • Eugenia Mardanugraha, 2017. "Economic Impact of Imposing Excise Tax on Plastic Bottles of Drinks," Economics and Finance in Indonesia, Faculty of Economics and Business, University of Indonesia, vol. 63, pages 38-52, June.
    • Handle: RePEc:lpe:efijnl:201703
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    More about this item

    Keywords

    excise tax; elasticity; demand; government budget; regression;
    All these keywords.

    JEL classification:

    • C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
    • H27 - Public Economics - - Taxation, Subsidies, and Revenue - - - Other Sources of Revenue
    • H60 - Public Economics - - National Budget, Deficit, and Debt - - - General

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