Tag: Indonesia

Indonesia: President Approves Tobacco Tax Hikes

Photo: Taco Tuinstra
Indonesian President Joko “Jokowi” Widodo approved a plan to increase tobacco taxes by 10 percent in 2023 and 10 percent in 2024, reports Tempo. The objective is to reduce the number of underage smokers.
“In today’s decision, the president has agreed to increase cigarette excise tax by 10 percent for [the] 2023–2024 period,” said Finance Minister Sri Mulyani after meeting at the Bogor Presidential Palace, West Java, on Nov. 3, 2022.
The increase in excise will apply to machine-made “white” cigarettes, machine-made kretek cigarettes and sigaret kretek pangan products.
Indonesia has struggled with high rates of underage smoking. The government aims to reduce smoking prevalence for 10-year-olds to 18-year-olds to 8.7 percent.
Cigarettes also represent the second-largest household expense—just below rice—in Indonesia.
November 3, 2022
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.
October 8, 2021
BMJ Completes New Headquarters

Photo: BMJ
BMJ has completed construction of its new headquarters.
Located at the BMJ complex near Jakarta, the building has been positioned to optimize the footprint of the specialty paper and packaging materials supplier. Equipped with the latest security technologies, the facility features comfortable rooms to accommodate visitors.
The building has been designed to minimize its environmental impact. Through the use of extensive greenery and a pool, BMJ has reduced its dependence on artificial climate control methods—a considerable advantage in a hot and humid country like Indonesia. A weaving structure surrounding the building’s facade and roof limits heat gain. Designed by computer and handcrafted by rattan master weavers, the structure offers shade during the day and architecturally pleasing shapes at night.
In designing its new headquarters, BMJ has emphasized utility, effectiveness and efficiency. For example, roster walls promote airflow while exposed ceilings facilitate maintenance. Consistent with BMJ’s philosophy of collaboration, the new facility features open workspaces with minimal partitions.
BMJ says its new headquarters, which were developed during the pandemic, reflect the company’s resilience and innovative spirit. “We believe our new headquarters symbolize every ‘eureka!’ moment we had in the past and will become inspirations for our ‘eureka!’ moments in the future,” the company wrote in a statement, referring to its “Eureka Everyday!” corporate slogan.
September 30, 2021
Jakarta Starts Removing Tobacco Ads

Photo: Adnan
The Jakarta Public Order Agency (Satpol PP) has begun removing cigarette advertisements across the city following a new regulation signed by Jakarta Governor Anies Baswedan, reports The Jakarta Post.
Since Sept. 13, Satpol PP officers across the capital have gone on unannounced inspections to minimarkets and shopping centers around the city to enforce the new regulation.
Head of East Jakarta Satpol PP Budhy Novian said his team had so far removed 22 cigarette billboards from public displays in East Jakarta since it started its series of inspections, which is set to end next week.
“[The inspections] will be carried out for two weeks starting Sept. 13. We plan to comb all subdistricts in East Jakarta,” Budhy told The Jakarta Post.
September 27, 2021
Indonesia Plans Cigarette Tax Hike

Photo: Taco Tuinstra
The Indonesian government is planning to raise the nation’s cigarette excise tax rates in an effort to reduce smoking prevalence, particularly among children, reports Tempo. The amount of the increase has not yet been determined.
“If we look at the data in 2019, it (the smoking prevalence among children) was still 9.1 percent. So there’s still quite a lot to be dropped,” said Titik Anas, the Finance Ministry’s special staffer for sectoral fiscal policy.
“The price of cigarettes in Indonesia is actually higher compared to the Philippines, Thailand and Vietnam. But if we compare it with Singapore and Malaysia, it is still relatively cheap.” Titik also warned that the government must be careful in increasing the cigarette excise tax as it will potentially spur illicit cigarette trade.
September 3, 2021
Indonesia to Crack Down on Illegal Trade

Photo: bayu harsa
The Indonesian Customs and Excise Directorate General wants to lower the share of unlicensed cigarettes after seeing a surge in the illicit products during the coronavirus pandemic, reports The Jakarta Post.
The goal is to bring the market share of illegal cigarettes below 3 percent, down from the 4.8 percent seen in 2020, according to Customs and Excise Director General Askolani. “[With the operation] we are conducting this month and next month, we hope we can reduce it to below 3 percent.”
Customs estimates show that illegal cigarette market share had dropped to 3.03 percent in 2019 before increasing recently.
August 31, 2021
Indonesia: Profits Plunge After Tax Hike

Photo: Taco Tuinstra
The profits of Indonesia’s two biggest cigarette manufacturers dropped significantly following a cigarette excise tax hike, reports The Jakarta Post.
Gudang Garam and Sampoerna saw their net profits decline 28.62 percent year-on-year to IDR1.74 trillion ($120.6 million) and 22.13 percent to IDR2.58 trillion, respectively, in the first quarter of the year.
The two companies’ net profits were hit by rising excise costs on top of weak cigarette demand. The finance ministry raised cigarette excises by around 12.5 percent starting in February after raising them 23 percent last year to deter smoking and raise state revenue.
However, the hike applied to only machine-made cigarettes and not to hand-rolled cigarettes.
Most of tobacco companies’ sales volume in Indonesia comes from machine-made clove cigarettes.
May 7, 2021
Indonesia: Tobacco Bracing for Tax Hikes

Photo: Taco Tuinstra
The government of Indonesia will increase the excise tax on tobacco and tobacco products in 2021, according to a report in The Jakarta Post.
The increase is expected to negatively affect cigarette makers amid weakened purchasing power in the pandemic, according to analysts.
Cigarette excise taxes will be increased by an average of 12.5 percent in February 2021.
“The majority of the companies’ sales volume comes from machine-made clove cigarettes, including those of Sampoerna and Gudang Garam,” Mirae Asset Sekuritas analyst Christine Natasya wrote in a research note.
The increase applies only to machine-made clove cigarettes and machine-made white cigarettes, according to Finance Minister Mulyani Indrawati. The hand-rolled cigarette excise tax will remain the same.
December 16, 2020
Haste Urged With New Health Warnings

Photo: Taco Tuinstra
Several medical and health organizations have urged Indonesia’s Health Ministry to accelerate its cigarette package graphic health warning revisions to Government Regulation No 109/2012. The groups noted that the draft revision began in May 2018 and should have been completed in a year’s time. The Coordinating Human Development and Cultural Affairs Ministry has also asked the ministry to review the regulations on online cigarette advertising and controlling vapor product consumption.
Tubagus Haryo Karbyanto of the National Commission on Tobacco Control (NCTC) said, “The slow revision process shows the government’s lack of awareness about the urgency of controlling high cigarette consumption in Indonesia. The Health Minister should immediately complete his homework.”
Aru Sudoyo of the Indonesian Cancer Foundation noted the nation’s high incidence of lung cancer among men (at 19.4 cases per 100,000), whole Indonesian Teachers Association chairman Unifah Rosidi said, “The Health Ministry does not seem to take the situation seriously while our children have very [poor knowledge] on the dangers of smoking.” Indonesian Heart Foundation chairman Esti Nurjadin said that the foundation had sent a letter urging President Joko Widodo to push for the revised regulation.
August 31, 2020
KT&G Donates Covid-19 Testing Kits to Indonesia

photo: KT&G
The Korea Tobacco & Ginseng Corp. (KT&G) of South Korea has provided the Indonesian government with KRW100 million ($81,140) worth of kits for diagnosing Covid-19.
Indonesia is in short supply of basic medical equipment such as diagnostic kits and protective clothing due to the rapid spread of Covid-19. KT&G secured a large number of diagnostic kits in Korea last month and sent them to Indonesia.
A local branch of KT&G delivered the kits directly to the Indonesian National Emergency Management Agency.
“We decided to provide emergency aid to help our company’s overseas branch to overcome the hardship, said Gyeongdong Kim, the head of social contribution at KT&G.
“I hope that it will be of great help to the Indonesian people who have had a long-standing friendship with South Korea.”
In related news, KT&G reported net profit of KRW293.88 billion in the first quarter of 2020.
The figure was up 7.3 percent over the prior-year quarter as cigarette sales grew steadily during the Covid-19 pandemic.
Nonetheless, KT&G’s revenue dropped by 0.6 percent to KRW1.19 trillion as operating profit fell by 9.5 percent to KRW315.01 billion.
May 15, 2020