Indonesia to Raise Cigarette Taxes

    The government of Indonesia will increase cigarette taxes next year, reports Tempo, citing Finance Ministry Head of Excise Sarno.

    According to Sarno, cigarette sales in Indonesia reached 356.5 billion units in 2019, a year in which there was no tax increase and cigarettes sold for IDR22,940 ($1.61) per pack. In 2020, a tax hike drove the per-pack price to IDR24,632 and sales dropped to 322 billion sticks.

    Sarno explained that the Finance Ministry decided to raise the excise because it is considered to be effective in controlling tobacco consumption or smoking, particularly among children. “The support from various parties makes us enthusiastic to support public health,” he said in a webinar held by the Center of Human and Economic Development of the Ahmad Dahlan Institute of Technology and Business Jakarta on Oct. 7, 2021.

    The Finance Ministry also aims to reduce the prevalence of underage smokers from 9.1 percent to 8.7 percent which is in line with the National Medium-Term Development Plan 2024.

     Sarno said that the ministry considered issues of health, state revenues, labor, farmers, industry, raw materials trade and illegal tobacco before raising the cigarette tax.