Indonesia Mulls Raising Cigarette Tax to Curb Smoking among Children

TEMPO.CO, Jakarta - The Indonesian government planned to increase the cigarette tax or tobacco products excise (CHT) to reduce the smoking prevalence, especially among children, which is targeted to reach 8.7 percent by 2024.

The Finance Ministry’s special staffer for sectoral fiscal policy, Titik Anas, said the government will again raise the CHT in 2022 but has not yet determine the hike amount.

“If we look at the data in 2019 it (the smoking prevalence among children) was still 9.1 percent. So there's still quite a lot to be dropped,” said Titik in an online workshop in Jakarta, Thursday, September 2.

The government had tried to increase the price of cigarettes, making them unaffordable to consumers. This could be seen from the affordability index of cigarettes which had increased in the last two years.

In 2020, the cigarette affordability index increased to 4.3 percent from the previous year’s 3.9 percent. The figure jumped again to 4.6 percent in 2021.

“The price of cigarettes in Indonesia is actually higher compared to the Philippines, Thailand, and Vietnam. But if we compare it with Singapore and Malaysia, it is still relatively cheap,” said Titik.

In the 2022 State Budget Draft (RAPBN), the government predicted that excise revenues would increase to Rp203.9 trillion or by around 12 percent of the 2021 excise revenue which was estimated to reach Rp182.2 trillion.

However, Titik said the government must be careful in increasing the cigarette tax as it potentially encouraged the circulation of illegal cigarettes.

Read: Sri Mulyani Announces 2021 Tobacco Excise Tax Increase of 12.5 Percent

ANTARA