TEMPO.CO, Jakarta - If President Joko Widodo gives the green light to the Tobacco Bill submitted by the House of Representatives (DPR) last December, he will look like a turncoat deserting his own principles embodied in the Medium-term Development Plan for 2015-2019. One of the points is aimed at reducing smoking among the under-18-year-olds, by 25 percent.
In 2015, teenage smokers made up of 7.2 percent of Indonesia's 255 million population. Jokowi aims to reduce that number to 4.5 percent in four years' time. Even without the Tobacco Bill, smoking among teens aged 10-14 years jumped from 0.7 percent in 2001 to 4.8 percent, according to the health ministry's primary health research carried out in 2013. The Bill sets very lax regulations on tobacco, particularly on its trade and control. The articles in the Bill also run counter to other existing laws. Advertisement and distribution of tobacco products, for example, overlap with articles in the health law and its derivative regulations.
Jokowi is not short of reasons to reject the Bill. In addition to health issues that are holding Indonesia from achieving the Millennium Development Goals, the Bill will, in fact, hurt the tobacco industry. If it is enacted, article 33 of the Bill limiting tobacco imports to only 20 percent with the pretext of protecting local tobacco farmers, will leave the industry gasping for air. After all, 70 percent of the tobacco needed for local production is imported, given that locally-grown tobacco is seen to be of inferior quality for mild cigarettes. If the government restricts imports, the industry will be left dithering over how to source them.
If the industry falls, the government's plan to maintain state revenues from customs and excise on tobacco products the rationale used by most regimes refusing to ratify WHO's Framework Convention on Tobacco Control (FCTC) will be invalid. The government's excuse for not signing the FCTC is that it would reduce state revenues, bankrupt small industries and destroy farmers' livelihoods debatable grounds, given that small businesses fail because of the tobacco cartel. Without the FCTC, according to a research by the University of Indonesia's Demography Institute, 65 percent of tobacco farmers want to switch to other sectors as tobacco farming is no longer profitable.
From around 300 billion cigarettes produced and sold, the government rakes in around Rp100 trillion annually in taxes. However, the financial gains are insignificant compared to some 400,000 deaths from smoking-related diseases. The health ministry calculated that the economic losses from smoking reached Rp378.7 trillion now that the government is bearing the healthcare costs.
The government must also question how the Bill was able to slip past the DPR without going through the proper legislative procedure. It is unclear who proposed the Bill, which the legislative body passed to the plenary session without any academic papers to back it up, after failing to win support for it in the past five years.
The best alternative to control cigarettes without killing this cash cow industry is to follow the footsteps of Thailand, which imposes 85 percent excise tax on cigarettes 5.6 times higher than Indonesia. Moreover, the cigarette business in India, US, and Australia remained unchanged, even after the governments ratified the FCTC.
Considering all of the above, Jokowi has no other option but to turn down the Tobacco Bill. Each time he is tempted to enact it, which his party supports, Jokowi must remember what he aims to achieve at the end of his term in office.(*)
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