Tobacco Excise Tariff Increase Is A Disaster For 7 Million Farmers, PKB Legislators Ask The Government To Be Wise

JAKARTA - Member of Commission IV of the Indonesian House of Representatives Daniel Johan asked the government to be wise in planning to increase the Tobacco Products Excise (CHT) tariff because it will have an impact on Indonesian tobacco farmers.

"Currently there are about 7 million farmers and tobacco workers who have to support their families. And if the government is to increase the cigarette excise tax again this year, the absorption of crop yields will fall by 30 percent," said Daniel Johan in his statement in Jakarta, Antara, Sunday, 5 September.

For the past two years, the condition of tobacco farmers has deteriorated due to the government's policy of increasing cigarette excise rates. As a result, there is a decrease in the absorption of crop yields by up to 15 percent.

The PKB legislator reminded that the amount of the excise tax increase is not just a mathematical calculation, but also has a deep social impact for farmers, industrial workers, and workers from hand-rolled kretek cigarettes (SKT).

"Every increase in tobacco excise and imports is a disaster for Indonesian tobacco farmers. Don't hit tobacco farmers with an increase in excise, so it is better for the government to cancel the plan to increase it," he said.

According to him, the rejection of the excise tax increase must be supported, because at this time it is not appropriate, and the Government's rationalization in increasing state revenues is not in accordance with existing conditions but instead burdens the social life of the community.

He reminded the government to focus on economic recovery and public health, especially vaccines to be accelerated to remote corners of Indonesia.

Previously, Special Staff to the Minister of Finance for Sectoral Fiscal Policy Formulation, Titik Anas, said the government would continue to reform policies related to tobacco excise (CHT).

"In the past, we used 'ad valorem', now it's specific. In the past, the structure had many layers (19) now it's 10, so there are fewer," said Titik in an online workshop in Jakarta, Thursday, September 2.

He explained, in terms of CHT tariffs, the Government always increases the tariff almost every year to increase state revenue and especially reduce the prevalence of child smokers.

According to him, with the increase in CHT almost every year, the price of cigarettes also continues to increase, and at the same time, the Government increases legal action for illegal cigarettes.

Titik said that part of the Revenue Sharing Fund (DBH) from excise revenues was also used to take action against illegal cigarette traffickers through the establishment of a tobacco center industry, joint operations to eradicate illegal Excisable Goods (BKC), and socialization of regulations in the excise sector.