Tightening At RPP Kesehatan Can Cause A Spike In Illegal Cigarette Circulation

Illustration of illegal cigarettes. (Photo: Doc. Antara)

JAKARTA - The government must think about the negative impact of tightening the tobacco products industry (IHT) which is considered to pose a threat in the form of increasing the circulation of illegal cigarettes.

This is as the government has prepared the Draft Government Regulation (RPP) as the executor of Law Number 17 of 2023 concerning Health.

"Another threat from the tobacco products industry (IHT) sector is the increase in the circulation of illegal cigarettes, this must also be watched out for," said Assistant Deputy for Trade and Industry Coordination (Deputy V) of the Coordinating Ministry for Economic Affairs Ekko Harjanto in the Indef Public Discussion agenda entitled 'The Death of the Indonesian Tobacco Industry in Jakarta, Wednesday, December 20.

Eko said the negative impacts caused by illegal cigarettes were not only from excise losses and reduced state revenues, but also from the social side and unfair business competition between industries.

"From a social perspective, illegal cigarettes have caused an increase in the number of smokers, especially among children and adolescents. This is due to affordability, which in the end these children are able to buy," he said.

"So, it will increase the number of smokers among children and adolescents," added Eko.

He considered that in the end the state did not accept state revenue in the form of excise duty and the number of smokers continued to increase.

"In fact, they only get the number of smokers, which increases in number if these illegal cigarettes become more massive," said Eko.

According to Eko, one of the indications of the impact of tightening the tobacco product consumption policy that has been carried out by the government is the decline in tobacco excise revenues or CHT.

"Based on data from the Directorate General of Customs and Excise (Ministry of Finance), the realization of CHT until November 2023 has only reached Rp179.98 trillion or is still below the revenue target for 2023 which is targeted at Rp218.69 trillion," he said.

As for the trend of cigarette production, continued Eko, also experienced fluctuations that tended to decline over the past 10 years.

"As of November 2023, cigarette production reached 285.84 billion cigarettes, which on an annual basis or year on year (yoy) decreased by -1.38 percent or approximately 4 billion sticks," he added.