Tobacco tax increase sought
Tobacco tax increase sought
The Jakarta Post, Jakarta
Calls increased on Wednesday for the government to boost its
anti-smoking campaign by raising taxes on cigarettes and
ratifying the global tobacco control pact.
"Increasing tobacco taxes will reduce consumption of the
products among youngsters and those on a low incomes," National
Committee on Smoking Control (NCSC) head F. A. Moeloek said in
Jakarta on Wednesday.
The proposed tax rise would also provide an alternate source
of income for the country, he said. The World Health Organization
is expected to start talks on the Framework Convention on Tobacco
Control (FCTC) from April 28-29.
Indonesia currently has the second-lowest tobacco tax
collection in Southeast Asia behind Cambodia, with an average of
only 31.5 percent in duties imposed on tobacco products. Last
year the country's industry contributed Rp 27 trillion in taxes
to the state budget.
"If the government increases the tax to 75 percent, those
taxes could generate a yearly income of up to Rp 75 trillion,"
Hakim S. Pohan, a member of the House of Representatives'
Commission IX overseeing health, manpower and transmigration
affairs, said.
The committee said the tobacco control campaign in Indonesia
should emphasize efforts to reduce the number of new consumers,
instead of trying to encourage long-time users to quit.
The WHO's FCTC, which was ratified by many Southeast Asian
countries on Feb. 27, includes the promotion of taxation as a
means of cutting down on cigarette consumption, imposing
restrictions on smoking in public places, putting larger health
warnings on cigarette packs and intensifying the fight against
tobacco smuggling.
The UN's health committee hopes the agreement, signed by 168
countries, with 62 of them ratifying it, would help reduce the
devastating economic and health impacts of tobacco consumption,
the second-leading cause of preventable deaths globally after
hypertension. Cigarette smoking is reported to be killing some
4.9 million people worldwide every year.
Ironically, Indonesia, which is one of the document's
drafters, backed off from ratifying the pact on the fear that it
would harm the country's tobacco industry and cause unemployment.
The national anti-smoking campaign has always faced strong
resistance from the smoking lobby that argues the industry is a
important income generator and employer.
"The idea of increasing tobacco taxes has been opposed by the
Ministry of Finance's directorate general of customs, saying it
would harm the industry," Hakim said.
However, the industry had proven to be an elastic sector that
would not be unduly harmed by an increase in taxes, which would
not cause massive unemployment, he said.
Taxation, however, was only an initial step in a proposed
series of tobacco control measures, Moeloek said.
"Further actions, as stated in the framework convention, must
soon be gradually implemented because the social cost inflicted
by the negative effects is too high," he said.
"The bottom line is that aside from increasing tobacco taxes
the government must join the global forum on tobacco control if
it does not want to be excluded from further talks," he said.
The government needed to ratify the agreement soon if it
wanted to avoid being denied important global aid for health
programs, he said. (003)