Tobacco Tax

Lost Rupiahs: A study on delayed implementation of optimal tax policy in Indonesia (PDF English 3.1mb, Bahasa 1mb

Documents how an opportunity to collect USD 7.2 billion (IDR 1.8 trillion) was forgone because of a complicated multi-tiered tobacco tax system. Despite regular tax increases and reduction of the tiers, kretek cigarettes in Indonesia have remained affordable because smokers shift to cheaper brands. As a result, over the past 10 years there has been only a miniscule 1.3 percentage decrease in smoking prevalence which has not made a dent in Indonesia’s 65 million smoking population.

Tax policy is a proven tobacco control measure and in Indonesia 457,700 lives could have been saved in 2021 if an optimal tax increase of 20 percent had been applied to tobacco. The tobacco industry has played a major role in undermining tax increases with misleading information and scare tactics. In 2022, Indonesia needs to increase excise tax by average 25 percent to have a significant reduction in smoking prevalence, save more lives and collect higher revenue. For full report:

Lost funds: A study on the tobacco tax revenue gap in selected ASEAN countries PDF 830kb

This report  assesses the magnitude of fiscal shortfalls in four selected ASEAN countries: Cambodia, Indonesia, Myanmar and Vietnam that are missing out on collecting more tobacco tax revenue due to the failure to raise tobacco taxes to the recommended levels, reduce the affordability of smoking, and/or remove complex tax structures. The key findings include: 1.3 million premature deaths could be prevented and additional
USD 4.81 billion in tax revenue would have been collected in Cambodia, Indonesia, Myanmar and Vietnam in the last two years if the governments of these four countries implemented the recommended tax changes

Uang yang hilang: Studi kesenjangan penerimaan cukai tembakau di Indonesia PDF 3.1mb (Bahasa)

This report  assesses the magnitude of fiscal shortfalls in Indonesia that is missing out on collecting more tobacco tax revenue due to the failure to raise tobacco taxes to the recommended levels, reduce the affordability of smoking, and/or remove complex tax structures. The key findings include:  the tax revenue gap in Indonesia is especially large in 2021, because the government did not increase taxes on the hand-rolled kretek cigarettes in this year and continued with its complicated tax system of 10 tiers.

The world’s first Index on implementation of WHO FCTC Article 6.
In 2021 edition, the index shows that more ASEAN countries pay attention to taxing tobacco products to reduce affordability and developing long-term tax roadmaps. However, the region as a whole made a slow progress in formulating and implementing effective tobacco tax policies. 

Tobacco Industry Interference in Tobacco Tax Policies in ASEAN Countries PDF 2.9mb

With an annual global death count of 8 million people (including 1.2 million non-smokers), the dangerous effects of tobacco consumption and exposure are well-known and well-documented. Big tobacco is a deeply profitable industry that makes billions of dollars from consumers, particularly those in low-and-middle-income countries and undermines effective tobacco control policies to protect its profits. This publication exposes and investigates tobacco industry interference in tobacco tax policies at global and regional levels, with survey findings from Cambodia, Indonesia, Lao PDR, Myanmar, Philippines, Thailand and Vietnam confirming that tobacco industry interference is a current and significant threat to the development and implementation of effective tobacco tax policies across the region.

Still Defective: Asia Illicit Tobacco Indicator 2017 Report PDF 5.3mb
This critique, authored by Dr. Hana Ross, Principal Research Officer of the Economics of Tobacco Control Project at the University of Cape Town, uncovers the poor quality of data used by Oxford Economics (OE), identifies multiple deficiencies in OE’s study methodology, and exposes the deceptive presentation of the study results to provide distorted illicit tobacco data in Asia and attempt to promote tobacco as essential products.

Measures to Control the Tobacco Supply Chain
PDF 2mb
This paper examines the implementation of key measures to control the supply chain and help in eliminating illicit trade in tobacco products in ASEAN specifically fiscal markings/excise tax stamps, tracking and tracing technologies, and licensing systems.

SEATCA Tobacco Tax Index 2019:
Implementation of WHO Framework Convention on Tobacco Control Article 6 in ASEAN Countries PDF 4.9mb
This report tracks implementation progress of tobacco tax policy against the WHO Framework convention on Tobacco Control (FCTC) Article 6 Guidelines in 10 ASEAN countries. It aims to identify and close gaps in and strengthen implementation of tobacco tax policies in each country. The Index shows that while some countries have made significant progress in formulating and implementing tobacco tax policies, the region as a whole has advanced slowly in the past few years, outpaced by economic and income growth. Most countries also do not have any long-term tobacco tax policies with regularly evaluated fiscal and public health targets. Important obstacles in some countries are their ineffective tobacco tax structures (e.g. Indonesia’s multi-tiered system or those with purely ad valorem tax systems) and weak tax administration (e.g. inadequate licensing and reporting requirements or lack of anti-forestalling measures), as well as tobacco industry interference in tobacco tax policy formulation (e.g. by claiming that implementing tobacco tax measures will lead to increased illicit trade and declines in tobacco tax revenue or create a burden for poor smokers) or in tax administration (e.g. through Codentify).SEATCA Tobacco Tax Index 2017 PDF 4.6mb

Review of Tobacco Leaf Import in Indonesia PDF 2.3mb

This report finds that the Indonesian Ministry of Trade Regulation No. 84/2017 on restrictions of tobacco import cannot be implemented because it runs contrary to other economic policies, trade agreements, and current practice that benefit the tobacco industry. Among other recommendations, there must be a policy coherence between the Regulation’s aim to reduce the problems facing tobacco farmers with the economic and trade policy and decisions, which benefits the business ventures in Indonesia.

Tobacco Industry Interference Undermined Tobacco Tax Policy in Indonesia PDF 1.3mb

The new report details how the tobacco industry used all possible avenues to interfere in the development of tobacco excise policy in Indonesia. The industry mobilized front groups, religious groups, academia, and research institutes, generating support to oppose tax increase and tiers simplification. Bahasa 13.mb

Cover_Final copy“Undermining Global Best Practice in Tobacco Taxation in the ASEAN Region – Review of ITIC’sASEAN Excise Tax Reform: A Resource Manual”

by Prof. Hana Ross, Principal Research Officer of the Economics of Tobacco Control at the University of Cape Town, is an academic review commissioned by the Southeast Asia Tobacco Control Alliance (SEATCA). The review of the manual’s section on tobacco taxation has revealed contradictions and inconsistencies when compared against international best practices and recommendations in the WHO Framework Convention on Tobacco Control (FCTC) Article 6 Guidelines on tobacco tax and price measures, which 180 governments worldwide have committed to implement. 

English 1mb, Bahasa 590kb

taxes prices coverTobacco Taxes and Prices in ASEAN : an Overview PDF 1.9mb

Governments can avail of several evidence-based interventions to reduce tobacco use, among which increasing tobacco taxes and prices is considered the most effective. Higher tobacco excise taxes can reduce tobacco consumption and save lives as well as generate more revenue for the government. The policy paper presents the comparison of cigarettes affordability cigarettes (in terms of Relative Income Prices (RIP)

Affordability and Impact on Consumption and Revenue

The economic growth coupled with low cigarette prices contribute directly to rising cigarette consumption, thus, there is a need to examine the level of cigarette affordability in terms of percentage of income used to purchase a pack of cigarettes, the trend of affordability over time, and the fiscal and public health impacts of tax increases. The policy paper is based on the research paper “Report on Cigarette Affordability and Impact of Tobacco Taxes” conducted in five ASEAN countries (Cambodia, Indonesia, Lao PDR, Philippines and Vietnam). It presents a brief factsheet of growing smoking prevalence and tobacco-related mortality in the country; much room to raise taxes; increasing nominal prices but declining real prices of cigarettes, thus raising affordability of cigarettes; positive fiscal and health impacts of increasing taxes as well as policy recommendations. A more in-depth discussion on research findings and analysis is also included.

ASEAN Tobacco Tax Report Card: Regional Comparisons and Trends

Higher taxes are needed to curb tobacco consumption in the ASEAN region. The report presents an overview of current tobacco tax systems and a regional comparison across 10 ASEAN countries: Brunei, Cambodia, Indonesia, Lao PDR, Malaysia, Myanmar, Philippines, Singapore, Thailand and Vietnam. It also highlights tobacco consumption, cigarette price trends of the most popular local and foreign brands, government tobacco tax revenue trend as well as health care costs of tobacco consumption. Recommendations to advance tobacco tax in each country and the region are also included.

SEATCA Initiatives on Tobacco Tax Annual Report

Other publications

The ASEAN Tobacco Control Atlas

FCTC Scorecard

Tobacco Industry Interference

Sustainable Financing for Health Promotion and Tobacco Control

Smoke-Free Environments

Packaging and Labelling of Tobacco Products

Tobacco Advertising, Promotion and Sponsorship

Tobacco Farming

Other Publications