Head of the Indonesia Consumers Foundation (YLKI), Tulus Abadi, claims that the government has not been serious in its attempts to control cigarette consumption.
They say their assertion is backed up by the amount of tax and prices charged for tobacco, which have only been raised recently.
The government recently announced that they will raise taxes on cigarettes by 23 per cent, and up the selling price by 35 per cent in 2020. However, there hasn’t been any tariff hikes since 2018-2019.
Tulus considers the tariff hike to be low, as the 23 per cent increase will be applied to all forms of tobacco. Since there are different categories of cigarettes, a 23 per cent tax increase might not be effective for the unpopular brands. Therefore, he claims that it will not make a significant impact.
“If the rate converts to rupiah, the increase in the retail price is only Rp10-35 per cigarette; it is useless. It means cigarette prices are still very affordable for consumers,” Tulus explained.
He further said that if the government wants to control the consumption rate, a minimum price of Rp70,000 per package must be charged. He urges the government to ratify the cigarette tax through Finance Ministerial Regulation (PMK). However, the plan still lacks legal force.