The Indonesian Government has decided to raise tobacco excise by an average of 10.04 percent starting 1 January 2018.
Speaking to reporters after a limited cabinet meeting led by President Joko Jokowi Widodo on Thursday (19/10) at the Merdeka Place, Indonesian Minister of Finance Sri Mulyani Indrawati said that decision was made by considering public opinion, especially seen from health aspect and the urge to control cigarette consumption, as well as to prevent the circulation of illegal cigarettes.
The Minister added that the decision to raise tobacco excise also takes into account the aspect of providing job opportunities for farmers and cigarette labors as well asto increase state revenues.
Sri Mulyani went on to say that the percentage of the rise in tobacco excise for cigarette companies will be seen based on certain variables, one of which production characteristics of a tobacco company. According to the Minister, the percentage of the rise for a company producing cigarettes with machines will be different from the percentage of the rise for a company producing cigarettes manually. Altough the average rise is 10.04 percent, it does not apply to all cigarette companies. Some will have higher increase; some other will have lower increase, Sri Mulyani said.
Regarding the fates of tobacco farmers who are possibly affected by the decision, Sri Mulyani said that President Jokowi has instructed Coordinating Minister for the Economy and related ministries to start preparing the farmers to plant other commodities besides tobacco.
The Minister further said that the Government is currently trying to improve health standard of the people by reducing cigarette consumption. However, the Minister added, when cigarette consumption rate has been reduced, the farmers have to receive supports and assistance from the Government in order to enjoy the benefits from their alternative works besides planting tobacco.
Also attending the meeting were Coordinating Minister for the Economy Darmin Nasution, Coordinating Minister for Human Development and Culture Puan Maharani, Minister of Health Nila F. Moeloek, Minister of Trade Enggartiasto Lukita, Minister of State Secretary Pratikno, and Cabinet Secretary Pramono Anung. (UN/ES) (EP/YM/Naster)