6 Million People Depend On The Cigarette Industry, Bamsoet Calls For Data-Based Policies

MAGELANG Member of the Indonesian House of Representatives as well as Deputy Chairperson of the Indonesian Chamber of Commerce and Industry and the Golkar Party, Bambang Soesatyo, emphasized that the cigarette industry is still an important pillar in supporting the national economy. This was conveyed when visiting the HS cigarette factory owned by young entrepreneur Muhammad Suryo which is located in Magelang, Central Java.

According to him, even though they are faced with increasingly strict regulations and increasing public awareness of the health impacts due to smoking, the cigarette sector still contributes significantly to state revenues and job creation.

"More than 6 million people depend on the cigarette industry, ranging from farmers, factory workers, to traders. This sector has a big impact on the welfare of many families in Indonesia," said Bamsoet during his visit, Sunday, June 29.

HS cigarettes themselves are legal products that are growing rapidly in the market, with several variants such as HS Original, HS Slim, and HS Click which have fruit flavors. This product is claimed to contribute to suppressing the circulation of illegal cigarettes while at the same time supporting the regional economy.

Bambang Soesatyo who is also the 15th Chairman of the MPR RI and the former Chairman of the DPR RI added that based on data from the Directorate General of Customs and Excise at the Ministry of Finance, state revenues from tobacco excise (CHT) in 2024 reached more than IDR 232 trillion or around 9 10 percent of the total state revenue. These funds are also used for public programs such as the National Health Insurance (JKN) through the Tobacco Product Excise Sharing Fund (DBH CHT) scheme.

On the labor side, the cigarette industry also absorbs millions of people in various lines. In factories, especially those on a small and medium scale in Central Java and East Java, thousands of plinting workers are still the backbone of production. While upstream, tobacco farmers and cloves depend their lives on the sustainability of this sector. Distribution, logistics, and retail traders are also part of the economic chain built from this industry.

However, the challenges faced are not light. The increase in cigarette excise rates in 2024 by an average of 10 percent risks encouraging the increase in the circulation of illegal cigarettes. Throughout 2023, Customs and Excise recorded more than 600 million illegal cigarettes were thwarted, with potential state losses reaching Rp820 billion. Without strict supervision, legal producers can be increasingly depressed, while the black market is growing.

In addition, pressure from global anti-tobacco campaigns and increasingly strict national regulations, such as the discourse on revising PP 109/2012 on advertising restrictions and promoting cigarettes, also adds to the burden on industry players.

If this policy is not accompanied by a thorough economic impact study, the labor-intensive sector and MSME players who depend on cigarette distribution can be affected.

"We need policies that are not only firm, but also fair and data-based. The goal is not only to control cigarette consumption, but also to maintain economic sustainability, fiscal, and protection for people who depend on this sector," concluded Bamsoet.