Maximizing government revenue: the search for the optimal cigarette excise rate in Indonesia
摘要
This study seeks to identify the optimal cigarette excise rate to maximize state revenues in Indonesia. Employing panel data regression and simulation modeling, the research explores the dynamic relationship between excise rates and reven using secondary data sources. The findings indicate a significant positive impact of excise rate increases on revenues up to a threshold, beyond which revenues begin to decline due to diminishing legal consumption. This study contributes a novel methodological framework to determine excise rate optimization and addresses a critical policy gap in the context of Indonesia’s unique socio-economic landscape. By integrating fiscal and social considerations, the research provides actionable insights for sustainable revenue generation and policy design.