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Current issue      roducts        news Indonesia ups minimum prices JAKARTA-Indonesia increased the minimum price for clove cigarettes on Oct. 1 by 39% to 225 rupiah per cigarette for the country largest cigarette makers like P.T. Gudang Garam and P.T. H.M. Sampoerna. The tax rate however remains the same at 36%. This move reduces the ability for companies to cut their prices as disposable income of the average Indonesian is declining. There are four classes, or tiers, of minimum prices for the industry, reflecting the size of the producers. Gudang Garam and Sampoerna are both "tier one" producers since they make more than 5 billion cigarettes a year. "Tier two" producers, such as Djarum and Bentoel which make between 2.5 billion and 5 billion cigarettes a year, will see the minimum price rise 35% to 175 rupiah a stick. "Tier three" producers, who make between 1 billion and 2.5 billion cigarettes, will see their minimum price rise 25% to 150 rupiah a stick. "Tier four" producers, who make less than 1 billion sticks, will have their minimum price rise 29% to 110 rupiah a stick. The tax rate for "tier two" producers it 28%, for "tier three" 24%, and for "tier four," is 20%.

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