RPP Health Can Cause Loss Of State Revenue Of Up To IDR 52.8 Trillion

Illustration (Photo: Doc. Antara)

JAKARTA - The government is drafting a draft or Draft Government Regulation in the derivative of Law (UU) No. 17 of 2023 concerning Health (RPP Kesehatan).

According to the plan, the RPP will contain a number of production control, sales, and sponsorship of tobacco products.

Unfortunately, the RPP will actually threaten the sustainability of the Tobacco Products Industry (IHT).

Researcher from the Center of Industry, Trade and Investment Institute for Development of Economics and Finance (Indef) Ahmad Heri Firdaus assessed that there was tax revenue to the state treasury that was lost if the regulation on tightening cigarettes was applied.

"Cumulatively, tax revenues will decrease by Rp52.8 trillion," said Heri in an Indef Public Discussion agenda entitled 'The Death of the Indonesian Tobacco Industry in Jakarta, Wednesday, December 20.

Heri said, there were three scenarios used by Indef to calculate the potential for tax revenue loss to the country's treasury.

In the first scenario, the impact of the number of packaging is quantized by aggregated production reduction in tobacco products by 20 percent.

Through this scenario, the lost tax revenue is estimated at IDR 40.07 trillion.

Second, the impact of product installation is quantized by a decrease in demand for retail services by 5 percent.

This scenario will have an impact on the loss of tax revenues of Rp9.95 trillion.

The third scenario is that the impact of limiting tobacco advertising is quantized by a decrease in demand for advertising services by 5 percent.

The impact is the loss of tax revenues of Rp2.78 trillion.

"Cumulatively, tax revenues that will be lost are IDR 52.8 trillion due to reduced excise revenues and other types of taxes as a result of the imposition of articles that harm the IHT sector and the intersecting sector," he added.