News that Indonesia’s Finance Ministry is considering canceling next year’s planned cigarette excise increase following consultations with the tobacco industry has drawn sharp backlash from health groups, academics, and child advocates, who warn it threatens public health and undermines anti-smoking efforts. Critics urge the government to instead pursue higher annual increases—at least 25%—along with reforms to simplify excise tiers, narrow tariff gaps, and reduce cigarette affordability.
Last week, citing the current 57% rate as the legal tax ceiling under Law No. 39/2007, Finance Minister Purbaya Yudhi Sadewa said cleaning up the illegal tobacco market and protecting jobs was more prudent. Industry players agreed, arguing that further tax hikes would strain manufacturers, farmers, and workers.
