TEMPO.CO, Jakarta - Tobacco farmers have rejected the government’s plan to raise the cigarette excise rate by 21.56 percent on average and the cigarette retail selling price (HJE) by 35 percent in 2020. Indonesian Tobacco Farmers Association (APTI) deputy sec-gen Agus Setiawan said that currently the absorption of local production had declined.
“Even before the hike is valid, demands for tobacco have dropped,” said Agus in a written statement, Friday, October 25.
Along with other tobacco farmers, Agus said that he had met Presidential Chief of Staff Moeldoko to deliver their aspirations. The farmers hoped the government would review their plan.
APTI chairman Agus Pamuji asserted that farmers hoped the government would peg a lower increase rate so the impact would not significantly affect farmers’ income. “Manufacturers fear to take much [benefit] because they are worried over the drop in cigarette consumption if the excise is put into effect,” Agus said.
Meanwhile, Moeldoko said the hike had been stipulated in the Finance Minister's Decree No. 152/2019 and included in the State Budget (APBN) scheme. However, he said he would seek a solution. “We will find the best solution that benefits farmers,” he added.
The Finance Ministry’s Customs and Excise Director-General Heru Pambudi said the government had prepared the scheme of revenue sharing funds (DBH) from cigarette excise for tobacco farmers, in which two percent of the excise would return to them through regional governments. “For instance, for tobacco farmers in Temanggung alone, the value may worth Rp34 billion,” Heru explained.
In a bid to ensure the implementation of the scheme, Moeldoko planned to establish an immediate coordination meeting between ministries and related stakeholders. The meeting's results will be realized in a ministerial decree and take effect soon in line with the cigarette excise hike.