Addition of Tobacco Excise Layers and Public Health Protection

The government is expected to commit to maintaining and protecting the function of excise policy as one of the instruments to control tobacco consumption in Indonesia. Jakarta (ANTARA) - The government is currently preparing plans to add a layer of excise tariffs on tobacco products (CHT) in response to the widespread circulation of illegal cigarettes in Indonesia. This new layer of excise tariffs is expected to attract illegal cigarette producers into the national excise system. The question arises whether the addition of this cigarette excise layer will effectively address the problem of illegal cigarettes. On the other hand, how will the addition of this excise layer impact the effectiveness of excise policy in protecting society from tobacco products? It is important to remember that excise policy fundamentally aims to distance society from access to addictive and harmful products, so its design and implementation should be carried out in such a way and not easily compromised for other matters, especially if not based on strong scientific evidence. Indonesia has a complex tiered (layered/tiered) tobacco excise system, where excise tariffs are applied differently to tobacco products based on type (kretek/non-kretek), production method (machine-made/hand-rolled), production volume, and retail selling price (HJE). From a public health perspective, as stated by the World Health Organization (WHO), the complex tobacco excise structure applied in Indonesia is not ideal, because it provides room for the industry to strategise in manipulating their products to enter lower excise tiers. As a result, cigarettes sold in the market remain varied, from expensive to cheap prices, making the excise policy ineffective in reducing cigarette consumption. The Ministry of Finance has also attempted to cut the number of cigarette excise layers from 19 in 2009 to eight in 2022. Nevertheless, the WHO and civil society organisations such as the Center for Indonesia’s Strategic Development Initiatives (CISDI) recommend that the cigarette excise structure should only have 3-5 layers. The commitment to achieve five layers was once shown by the Ministry of Finance in 2017 through PMK Number 146/PMK.10/2017. Unfortunately, instead of continuing the commitment to achieve five layers, in 2026 the government is planning to add one excise layer in the name of addressing the circulation of illegal cigarettes. This step is certainly a setback from the initial efforts to simplify the tobacco excise structure in Indonesia. Civil society coalitions working in public health have often stated that there is no strong scientific evidence showing that excise policy, whether in terms of rate or structure, plays a primary role in increasing the circulation of illegal cigarettes. Excise policy and illegal cigarettes