Cigarette Tax Can Be Used As A Source Of Financing For Health Including Cancer

JAKARTA - State revenues from taxes or excise taxes on cigarettes are quite large, reaching more than Rp. 173 trillion in 2021, some of which can be used as a source of health financing, including for the treatment of cancer.

This was conveyed by the Head of Health Insurance Financing and Management Policy (KPMAK) Faculty of Medicine, Gadjah Mada University (FK UGM) Diah Ayu Puspandari.

"(From) tobacco products there are funds taken from sales, for example cigarette excise, cigarette taxes which are collected as a source of income for the state. Cigarette taxes are quite large, so the next hope is to be advocated for other sources of financing that can be used for give hope to cancer survivors," he said, quoted by Antara, Saturday, March 5.

Diah said the government had actually started to allocate part of the cigarette tax and tobacco excise tax received by local governments in 2020 for the health sector. However, in December 2020 the allocation of this fund decreased from the original 50 percent to 25 percent.

"In 2020, we were able to get quite a large contribution from cigarette excise, around 50 percent for health. But not long ago, in December 2020, there was a dynamic that shifted the proportion from 50 percent to 25 percent," he explained.

According to him, there needs to be advocacy efforts so that the central government can reallocate funds for the health sector to 50 percent or provide flexibility in the use of cigarette tax and tobacco excise funds for the development of the health sector at the regional level.

On the other hand, the central and local governments need to develop technical guidelines for innovation in the use of cigarette taxes and tobacco excise in the health sector, for example to optimize spending on drugs and medical devices, including innovative cancer drugs, which will ultimately benefit the community.

"If we look at it, 25 percent of the variation is high in each region and the average area does not have the courage to make innovations, using them according to priorities that have been determined by the Ministry of Health and the local Health Service," said Diah.

Diah said that there needs to be accuracy in managing resources, both financing and others, in order to be able to parse the problem of health financing efficiently and effectively.

Meanwhile, in terms of funding sources, we can follow the example of other countries that bring in funds from religious charities to be used for things that are not covered by the existing health financing schemes.

"In some countries, they have managed to manage the funds generated in the form of a sin tax, which contributes to health problems. This is managed in part by returning to address health problems," said Diah.