Higher Tobacco Tax Aims to Kick Indonesia’s Habit

With 67 percent of Indonesian males over 15 years old smoking, and about a quarter of boys aged 13 to 15 hooked on cigarettes, officials and activists hope that a recent increase in the tobacco excise will be the first step toward rolling back the country's nicotine addiction.

The government announced on Tuesday that it would increase the excise by an average of 8.5 percent next year to boost state revenue and also discourage people from taking up the unhealthy habit.

"We welcome the government's plan," said Tubagus Haryo Karbyanto, chief campaigner for the National Commission on Tobacco Control (Komnas PT).

"Our cigarette prices are so low that even children can afford to buy them. That's why the smoking epidemic is so massive."

Cigarettes sell for about $1 a pack in Indonesia, far less than in neighboring countries such as Malaysia and Thailand, where a pack goes for $3 to $4. In developed countries like the United States and Australia, cigarettes can cost upward of $10 per pack. Even the excise on cigarettes, which is currently less than 40 percent, is extremely low by regional standards.

Tubagus said that raising cigarette taxes was the fastest way to curb smoking, particularly among children and low-income families.

"Besides, the tax will not affect the cigarette companies, because they will pass on [the cost] to their customers," he said.

The Global Adult Tobacco Survey released this year ranked Indonesians as the heaviest smokers in the world, with 67 percent of all male citizens over 15 years old lighting up consistently. According to the WHO, about a quarter of Indonesian boys aged 13 to 15 also smoke.

Tubagus urged the government to amend the law on taxes and excises, which stipulates that the tobacco excises can be raised up to 57 percent, while that for alcoholic drinks can be set at 80 percent.

"Cigarettes should be treated the same as alcoholic beverages to get better results," he said.

However, Health Minister Nafsiah Mboi argued that the 8.5 percent increase was initiated to avoid resistance from tobacco farmers and lobbyists.

"Don't just look at the quantity. It's better to do it gradually than face resistance," she said.

The Indonesian tobacco industry employs millions and is one of world's largest cigarette-producing markets, with about 6 percent of the government's revenue coming from cigarette excise.

The powerful tobacco lobby has been actively campaigning to block regulations that would restrict sales.

Activists say that despite creating more state revenue, the industry absorbs money from families in lower income brackets, trapping them in a cycle of poverty.

A recent survey by the University of Indonesia's Demographic Institute found that 57 percent of Indonesian households bought cigarettes, and that cigarettes were the country's second-largest expense after rice. According to the survey, the average household spends Rp 36.5 million ($3,800) every 10 years on cigarettes.

Indonesia is among a handful of countries that has refused to sign an international tobacco control treaty.

Nafsiah said Jakarta would soon sign the UN Framework Convention on Tobacco Control, but did not give a time frame.

"We'll keep pushing. I want it by the end of this year. But it's hard because we should consider all stakeholders," she said.

The convention calls for restrictions on advertising, promotion and sponsorship of tobacco products and bans sales of cigarettes to minors.

(source: www.thejakartaglobe.com)