Expert: Additional layer of cigarette tax risks strengthening smoking culture
Jakarta — Ede Surya Darmawan, dean of the School of Public Health at the University of Indonesia, has warned that the Ministry of Finance’s planned addition of a new cigarette excise tax bracket will actually strengthen smoking culture by increasing the range of options available to smokers.
The additional tax tier is intended to provide space for illegal cigarette producers to transition to the legal market, ensuring that tobacco industry operators meet their tax obligations to the state.
Speaking in Jakarta on Friday, Darmawan noted that smokers are predominantly from lower-middle income groups who struggle to meet their daily living expenses yet continue to spend money on cigarettes due to addiction, perpetuating a harmful cycle. He pointed out that this drives up prices, yet because of addiction, money that fathers should use to support their families and provide nutritious food is instead spent on cigarettes.
Darmawan argued that cigarette excise taxes should be simplified to facilitate implementation, not increased, as complication risks industry interference and makes cigarettes more accessible to the public. He referenced the United Nations Development Programme’s concept of “Enlarging People’s Choices,” noting that policy should narrow unhealthy options whilst expanding choices for healthier living.
He criticised the lack of transparency in the tax policy and emphasised that excise increases should deter smoking rather than expand it. He stressed that such policy should involve parliamentary debate, citing Law No. 7 of 2001 on Tax Regulation Harmonisation, which mandates that changes to tax objects must be discussed with parliament and incorporated into the state budget law.
Darmawan also advocated for educating smoking families to observe healthy household practices, such as not smoking indoors and smoking only in open areas to prevent smoke from entering household furnishings and spaces.
According to the 2023 Indonesia Health Survey conducted by the Ministry of Health, approximately 70 million people are active smokers, with 7.4 per cent aged between 10 and 18 years.
Finance Minister Purbaya Yudhi Sadewa announced on Wednesday (14 January) that the government plans to add one new tobacco excise tax bracket this year, stating: “We will ensure one new layer, though this is still under discussion.”
The cigarette excise tax structure has been simplified from 19 brackets in 2009 to 8 brackets in 2022, with the current structure outlined in Finance Ministry Regulation No. 97 of 2024.