ANALYSIS OF FORESTALLING BEHAVIOR OF THE CIGARETTE INDUSTRY IN INDONESIA

Abstract

This study aims to analyze the behavior of companies in foresting under various conditions of multitier specific excise tariff structure  in Indonesia. This was done by the company as a form of anticipation of changes in excise rates and Retail Selling Prices set by the government. The timing of announcements, simplification of tiers and production limits also provide incentives and disincentives for companies to carry out foresting. To see the effect of changes in the tariff structure, CK-1 data (excise tape ordering) obtained from the Directorate General of Customs and Excise (DJBC), Ministry of Finance, from 2009 to 2017 was used. Empirical results show that excise tariff policies encourage companies to do forestalling. While the retail selling price policy, longer announcement times and the difference between total production and production limits hold companies back from foresting. Simplification policies and increasing production limits can reduce high levels of forestalling.