4 October 2016
With the current government aiming high on health development, its decision to raise cigarette excise by an average of 10.54 percent starting next year shows otherwise. The incremental increase affirms the government’s lackluster effort to build a healthy nation to say the least.
When the Finance Ministry regulation takes effect in January, cigarette retail prices will only go up by 12.26 percent from the current price. History beckons that excise rate hikes on cigarettes have so far failed to force smokers to quit the habit.
Many of them did not even reduce their cigarette consumption either. That happened because the cigarette retail price remained affordable for everybody, including teenagers who relied on pocket money from their parents to indulge their smoking habit.
We could have expected a far different story had the government taken a bold move by setting an extremely high duty that would double or triple the cigarette retail price. The considerably low cigarette prices is one of the reasons why the smoking population in the country keeps growing.
The latest UN Office of Drugs and Crime data found that Indonesia’s average cigarette price of US$1.32 per pack is among the cheapest in the world. In Southeast Asia, Indonesian cigarette prices are only more expensive than in fellow developing countries Cambodia, the Philippines and Vietnam.
In developed countries, apart from enforcement of regulations and legislation discriminatory against smokers, retail cigarette prices are set very high so as to deter people from smoking.
A few months ago, a study conducted by a University of Indonesia medical doctor sent shockwaves after finding that the majority of 1,000 respondents he surveyed said they would consider giving up smoking if pack of cigarettes increased to Rp 50,000 (US$3.80).
The Central Statistics Agency (BPS) has found that 70 percent of Indonesian smokers come from the poor families. It can be safely said had the government taken the survey into consideration in setting the new cigarette excise, the country’s population of smokers would likely dramatically decrease.
There is a risk, however, of rampant trade of illegal cigarettes if the excise is set too high. But it will boil down to the government’s commitment to improve monitoring. The Trade Ministry and Industry Ministry will contribute a lot in fighting illegal trade in cigarettes through registration of all cigarette machines operating in the country.
Various studies have discovered that the costs of treating tobacco-related diseases, not to mention production loss, outweigh state revenue from cigarette excise. The Global Adult Tobacco Survey (GATS) in 2014 revealed that cigarette consumption killed 190,260 people in Indonesia that year, or 500 lives lost every day. The number would skyrocket if it includes passive smokers, who are more vulnerable to cigarette-related diseases than smokers themselves.
The question that remains unanswered is why the government, despite the evidence of cigarette harm, has for a long time acted in favor of the tobacco industry and all multiplier effects it has created that go against the noble goal of promoting good health for all.