Policies on the Imposition of Excise Tax and Other Regulations Concerning Denatured Alcohol in Indonesia

A Comparative Policy Study with the United States of America

Abstract

Ethyl alcohol tax can be one of the reliable state revenues. However, denatured ethyl alcohol is exempt from excise tax. This denaturation serves as a control so that it is not misused for the manufacture of illegal alcoholic beverages and to support industrial development as a raw material in the manufacture of final products. This study aims to analyze excise tax policies and other related regulations on denatured alcohol in Indonesia and the United States. The results of this study indicate that regulations regarding denatured alcohol have been regulated in various laws and regulations in Indonesia. However, when compared to the United States, denatured alcohol regulations are more comprehensive. There are at least 3 regulations that can be adopted by Indonesia by taking into account Indonesia's diverse needs and conditions, namely strengthening institutional aspects, define various types of denaturation which adapted to the industry needs, and the existence of facilities for submitting new formulas and the utilization of specially denatured alcohol. Through this regulatory adjustment, it is hoped that Indonesia will be able to attract investors whose business apply denatured alcohol in the manufacture of the finished goods to develop their businesses in Indonesia.