Jakarta, CNBC Indonesia \u2013 A plan to issue a regulation from the\nCoordinating Minister for Human Development and Culture setting a\nnicotine limit of 1 mg and a tar limit of 10 mg, along with a planned\nHealth Ministerial Regulation tied to the official Macroeconomic\nFramework and Fiscal Policy Principles (KEM-PPKF) 2027 document, could\nhave a damaging impact on the industry.<\/p>\n
Sefdin Alamsyah, Chair of the Standing Committee on Relations Between\nState Institutions and Government at the East Java Chamber of Commerce\nand Industry (KADIN Jatim), admitted he was alarmed by the\nprovisions.<\/p>\n
According to him, this policy is a tragic one because the government\nneeds state revenue from Tobacco Excise (CHT) whilst simultaneously\npreparing a regulation that would kill off its own production\nengine.<\/p>\n
\u201cIn KEM-PPKF 2027, the President has placed CHT as a priority for\noptimising state revenue. To secure large excise receipts, cigarette\nproduction and sales volumes must be stable, or even increase. No\ncountry raises its tax target whilst deliberately killing off its tax\nbase. Yet the planned Health Ministerial Regulation and Coordinating\nMinisterial Regulation capping nicotine at a maximum of 1 mg is madness\nin terms of the arithmetic,\u201d he said in an official statement on Friday\n(17\/7\/2026).<\/p>\n
In fact, 90% of the local tobacco that has long been the backbone of\nfarmers naturally contains 2-8 mg of nicotine. In other words, if this\nrule is forced through, tonnes of tobacco harvested from fields across\nEast Java, Central Java, Lombok and Sumatra would automatically become\nillegal to process.<\/p>\n
\u201cNo legal cigarette factory could use that raw material because it\nexceeds the limit. The impact would be a collapse in national cigarette\nproduction. Factories shut. Farmers lose their buyers. And the\nculmination: the CHT revenue target in KEM-PPKF 2027 collapses\ninstantly,\u201d he explained.<\/p>\n
Extreme limits on nicotine and tar content beyond the capacity of the\ndomestic industry, he continued, would no longer amount to\nintensification but could instead trigger de-industrialisation. He added\nthat the most worrying aspect is the blowback effect of this policy.<\/p>\n
KEM-PPKF 2027 explicitly seeks to tighten supervision so that illicit\ncigarettes do not proliferate and leak tax revenue. However, if the\nCoordinating Minister\u2019s regulation and the Health Ministerial Regulation\nare forced through, cigarette consumers who have for years been\naccustomed to the characteristics of local tobacco will not stop\nsmoking. They will look for alternatives.<\/p>\n
\u201cAnd when legal factories are banned from producing cigarettes with\nnicotine content above 1 mg, who will fill the market gap? The answer:\nillegal cigarette producers without excise stamps. Or consumers will\nturn to \u2018tingwe\u2019 \u2014 nglinting dewe (mixing and rolling their own tobacco\nmanually using cigarette paper),\u201d Sefdin explained.<\/p>\n
\u201cSo the Coordinating Minister\u2019s regulation and the Health Ministerial\nRegulation could actually create a far more massive black market.\nIllegal cigarettes will flood corner shops. Authorities will struggle to\nmonitor the situation, and state revenue will not merely fail to rise \u2014\nit will crash dramatically,\u201d he protested.<\/p>\n
Strong rejection has also come from farmers in Temanggung, Central\nJava. Not long ago they staged a protest at the office of the\nCoordinating Ministry for Human Development and Culture against the rule\non nicotine content limits.<\/p>\n
Agus Parmuji, Chairperson of the Central Leadership Council of the\nIndonesian Tobacco Farmers\u2019 Association, said the protest was attended\nby community figures and village heads from Central Java, particularly\nTemanggung, Wonosobo, Magelang and Kendal, as well as figures from East\nJava. This was done to convey their aspiration for the withdrawal of the\ndraft Coordinating Ministerial Regulation on capping nicotine and tar\nlevels.<\/p>\n
According to Agus, the rule could instead be set by taking into\naccount the concrete conditions and characteristics of Indonesian\ntobacco. He noted that Indonesian tobacco has a minimum nicotine content\nof 3 mg.<\/p>\n
\u201cIf the variety does not match local characteristics, the output will\nnot match industry demand, and I ask: is the government willing to buy\nour harvest? Of course not,\u201d he said.<\/p>\n
On the same occasion, Lukman Sutopo, a tobacco farmer, said that\ntobacco in the Temanggung, Wonosobo, Magelang and Boyolali regions, as\nwell as East Java, has high nicotine content. So when tar and nicotine\nlevels are capped, tobacco farmers will suffer.<\/p>\n
\u201cThe derivative of Health Law Number 28 of 2024 concerning the\nrestriction of nicotine and tar levels \u2014 please review it. Do not let\nthis policy, once rolled out, harm tobacco farmers across Indonesia.\nThose affected will not only be tobacco farmers, but also tobacco farm\nlabourers and so on. There are many aspects,\u201d he explained.<\/p>\n
Meanwhile, Taat Supriadi, Head of Tlogomulyo Village in Temanggung,\nalso demanded the withdrawal of the regulation.<\/p>\n
\u201cBecause if this legislation goes through, our farmers are finished.\nClearly, because our tobacco\u2019s content exceeds the approved tar or\nnicotine levels,\u201d Taat said.<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/business-and-farmers-warn-proposed-nicotine-and-tar-limits-will-devastate-industry-and-state-revenue-1784796818", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }