Indonesia further rise in the excise tax would hurt the cigarette industry..

Lawmakers may not increase excise tax on cigarettes. Indonesia ranks fifth among countries with the highest tobacco consumption globally. Over 62% of Indonesian adult males smoke regularly. "Tobacco taxation has been the strongest tobacco reduction measure that exists in the world today." (Lynn Greaves, VP of the Saskatchewan Coalition for Tobacco Reduction) Opponents argue that an increase in excise tax will harm millions who depend on the tobacco industry for a living.

The Indonesian tobacco industry supports 600,000 workers and 3.5 million tobacco and clove farmers, according to the Cigarette Producers Union in Jakarta. Analysts believe the livelihoods of 12 million people are directly or indirectly dependent on the country's tobacco and cigarette sector. Finance Ministry's Director General of Customs and Excise Anwar Surpijadi said he was concerned a further rise in the excise would hurt the cigarette industry and risk the jobs of its millions of workers.

Cigarette prices (maybe lowest in the world) in Indonesia are much lower on average than those of neighboring countries. A pack of Marlboro sells for Rp 9,000 (98 cents); a pack of cigarettes in Malaysia US$2, while in Singapore about US$7.

Indonesians spend on average 2.5 times more on tobacco than on education, and 3.2 times more on tobacco than on health. Traditionally viewed as unacceptable practice, smoking among Indonesian women is now seen as modern and trendy, especially in large cities. "The monthly cigarette consumption of people on low incomes is equal to 15 times what they spend on meat, or eight times what they spend on education" said researcher Abdillah Ahsan in a study he reported.

The World Health Organization and the World Bank must step in and help these people. There is a need to develop and implement alternative industries other than tobacco. Indonesia now is a haven for the tobacco industry. Philip Morris International (PMI) back in March of 2005 purchased an Indonesian company PT HM Sampoerna.)

Related news brief: Most Indonesians support moves to ban tobacco advertisements..

References: Govt may not raise tobacco excise by Aditya Suharmoko, The Jakarta Post, 8/20/2008; Excise tax hike will not kill off industry by Aditya Suharmoko, The Jakarta Post, 08/01/2008; The relevance and prospects of advancing tobacco control in Indonesia, A. Achadi et al., Health Policy , Volume 72 , Issue 3 , Pages 333 - 349.

Related information: Making the New Indonesia Work for the Poor, Box 3.6 (pg44) Tobacco damages poor households' finances as well as their health, World Bank, 11/2006.

Indonesia, is the only nation in Asia which has NOT signed or ratified the
WHO Framework Convention on Tobacco Control (FCTC) - the global anti-tobacco treaty.