Four Aspects That Are Considered By The Government To Increase Cigarette Excise

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Finance has set an increase in cigarette excise by around 10 percent for the next 2023-2024 period.

Deputy Minister of Finance (Wamenkeu) Suahasil Nazara said this decision was based on four important aspects.

"We always try to balance this every time we talk about cigarette excise policies and become the philosophical basis for determining cigarette policy every year," he said on Friday, October 4.

The first aspect, continued Suahasil, is consumption control which has something to do with health. He said, the imposition of excise was intended as an effort to control consumption as mandated by the Excise Law.

"This policy is also part of the 2020-2024 National Medium-Term Development Plan (RPJMN) to improve the quality of human resources through a decrease in smoking prevalence to 8.7 percent in 2024," he said.

For information, the imposition of excise duty is also intended to reduce cigarette consumption in the poor group, which reaches 11.6 to 12.2 percent of household spending.

Second, the production aspect related to labor sustainability. Excise policy is claimed to have taken into account the impact on tobacco farmers, workers, and the tobacco products industry as a whole.

The cigarette company that produces tobacco products has something to do with employment. Especially for the Indonesian tobacco products industry, which even has a hand-worked segment. There must be something to do with the absorption of our workforce," he said.

The third is related to state revenues. Excise policy is said to support national development programs through state revenues reaching Rp188.8 trillion in 2021.

Then the fourth is related to the supervision of illegal excisable goods (BKC). The higher the cigarette excise tax, the higher the chance of illegal cigarettes circulating, which currently has reached 5.5 percent.

"So it is important that we carry out continuous mitigation, continuously, on policies that have the potential to encourage illegal tobacco products," he asserted.

In detail, Sri Mulyani's representative explained the new tariffs that apply to machine kretek cigarettes (SKM) 1 and 2 which on average increase 11.75 to 11.5 percent.

Then, engine white cigarettes (SPM) 1 and 2 rose 12 to 11.8 percent. Meanwhile, hand kretek cigarettes (SKT) 1, 2, and 3 increased by 5 percent.

Meanwhile, the excise tax on e-cigarettes will increase by 15 percent and 6 percent for other tobacco processing products (HPTL) will increase every year from 2023 to 2028.

"Later on, the excise profit-sharing fund will be focused on improving health, such as the facilities of Puskesmas and Posyandu, handling stunting, improving the welfare of farmers and laborers, and eradicating illegal cigarettes," concluded the Deputy Minister of Finance Suahasil.