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)