The Impact of Excise Tariffs on The Performance of White Cigarette Industry

Abstract

The aims of this study was a) to analyze the factors that affect the performance of production of white cigarette industry, b) analyze the factors that affect the performance of the consumption and c) simulate, if the government a tax increase of 5 percent or 20 percent of the performance of the industry. The results showed that a) the performance of the production positively affected by the real price of white cigarette and technology. Otherwise, the price of real prices of clove cigarettes, excise tariff and dummy of customs policy negatively affect the production. White cigarette labor and dummy of health policy did not affect the production of white cigarettes, b) the performance of the consumption positively affected by the price, consumption and national income. Otherwise, dummy of excise policy negatively affect consumption changes clove cigarettes. The price of clove cigarette as well as excise rate on cigars and health policy dummy did not significantly affect clove cigarette consumption, and c) Excise instrument very effective role as the main contribution of government revenue and also effectively reducing consumption both clove and white cigarettes. (Abstract)