Finance Ministry Determined to Raise Cigarette Tax Next Year

TEMPO.CO, Jakarta - The Finance Ministry confirmed that the cigarette tax will be increased next year. According to the Ministry's Head of Excise, Sarno, the increase is considered effective in reducing sales of cigarettes per year.

"There was no tax increase in 2019 and the sale reached 356.5 billion cigarettes with the price of IDR 22,940 per pack. In 2020, there was a tax increase which resulted in price increase to IDR 24,632 per pack, and so the sale dropped to 322 billion cigarettes," said Sarno in a webinar held by the Center of Human and Economic Development (CHED) of the Ahmad Dahlan Institute of Technology and Business Jakarta, Thursday, October 7, 2021.

Sarno explained that the Finance Ministry decided to raise the excise because it is considered to be effective in controlling tobacco consumption or smoking, particularly among children. "The support from various parties makes us enthusiastic to support public health," he added.

The Finance Ministry also targeted to reduce the prevalence of child smokers from 9.1 percent to 8.7 percent which is in line with the National Medium-Term Development Plan or RPJMN 2024.

Sarno said that the ministry took into account issues of health, state revenues, labor, farmers, industry, raw materials trade, and illegal tobacco before raising the cigarette tax. "Ibu Sri Mulyani (Finance Minister) as a mother is very concerned about children's health problems in order to catch the demographic bonus of Indonesian children in the future," Sarno concluded.

ISTIQOMATUL HAYATI