Impact of Increased Tobacco Tax on Smoking Rates in Indonesia

Regulations by 2FIRSTS.ai
May.16.2024
Impact of Increased Tobacco Tax on Smoking Rates in Indonesia
Despite Indonesia's efforts to reduce smoking rates by raising tobacco taxes, statistics show a stagnant 28% of smokers.

According to a report by Bisnis on May 15th, despite the Indonesian government's policy of increasing tobacco taxes aimed at reducing smokers, statistics show that the current proportion of smokers remains stagnant at 28%. Heri Susianto, the chairman of the Indonesian Tobacco Industry Forum (Formasi), stated that despite the increase in tobacco tax rates, it has not effectively reduced the number of smokers in Indonesia.

 

According to Heri, based on the National Mid-Term Development Plan 2020-2024, the government's goal is to reduce the smoking rate among children aged 10-18 from 9.1% to 8.7% by 2024. However, achieving this goal is influenced by various factors.

 

Raising tobacco taxes has not effectively lowered smoking rates to meet the goals of the national mid-term development plan," said Harry.

 

The Minister of Finance has clearly stated that despite increasing tobacco taxes to raise prices, the number of smokers in Indonesia remains high, with a rising trend. Even with continuous implementation of policies to raise tobacco tax rates and retail prices, Indonesia's smoking rate remains stagnant at around 28%.

 

The proportion of smokers in the early age group in 2013 was around 7.2%, in 2016 it was around 8.8%, and in 2018 it was around 9.1%. This clearly indicates that raising tobacco taxes did not effectively reduce the proportion of smokers in the early age group.

 

The government needs to take additional non-financial measures to reduce the proportion of smokers, such as implementing large-scale supervision and education. The main factors affecting smoking rates include environmental factors such as family, school, and peer environments, as well as social culture, psychological education, cognitive factors, and economic factors. All of these factors are interconnected, so the government should start changing its beliefs and methods to reduce the smoking rates among 10-18 year old children.

 

Helen believes that the tobacco industry should not be responsible for reducing smoking rates, as it already bears a significant financial burden and must comply with other regulations. The tobacco industry indirectly contributes to reducing smoking rates through taxes paid, such as tobacco tax, value-added tax, local tobacco tax, and corporate income tax.

 

It must be remembered that the tobacco industry is the largest contributor to tax revenue, accounting for 96% of total tax revenue," he said. Therefore, the Treasury Department is adjusting fund allocation to facilitate the implementation of regulations called DBH CHT.

 

According to Regulation 206 of 2020, 25% of DBH CHT funding will be used for healthcare, including reducing the rate of stunting. He stated that the establishment of a country is to manage the distribution of power. Considering that the tobacco industry has already contributed significantly to the fiscal economy and has complied with relevant regulations, such as placing health warnings and information on tobacco packaging, it should no longer be required to bear the responsibility of reducing smoking rates.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

PMI Global Communications Chief Moira Gilchrist: Why AI Matters More Than Ever in the Smoke-Free Transition
PMI Global Communications Chief Moira Gilchrist: Why AI Matters More Than Ever in the Smoke-Free Transition
Philip Morris International (PMI) Chief Global Communications Officer Moira Gilchrist said artificial intelligence is changing how companies understand audiences, manage owned information channels and communicate business transformation. PMI is using AI-generated audience personas to test messaging while optimizing its corporate website and other owned channels for large language models. As PMI continues its transition from cigarettes toward smoke-free products, Gilchrist said owned data and corporate channels are becoming increasingly important in demonstrating the scale of that transformation.
Aug.26
Product | JNR Launches Shisha Hookah 70K E-Hookah With 60ml E-Liquid and 0.6% Nicotine
Product | JNR Launches Shisha Hookah 70K E-Hookah With 60ml E-Liquid and 0.6% Nicotine
JNR has introduced the Shisha Hookah 70K, a high-capacity rechargeable disposable vape designed around a hookah-inspired experience. The device comes prefilled with 60ml of e-liquid at 6mg/ml (0.6%) nicotine strength, alongside a 1,000mAh rechargeable battery and a 0.38Ω single mesh coil. It also features adjustable airflow and battery and e-liquid level displays. JNR claims the device can deliver up to 70,000 puffs and offers more than 20 flavors. Retail listings for the product have appeared in markets including Tunisia.
Market
Aug.24 by 2Firsts Perspectives
Malaysia Withdraws Appeal Against Liquid Nicotine Ruling as Vape Regulation Framework Enters New Phase
Malaysia Withdraws Appeal Against Liquid Nicotine Ruling as Vape Regulation Framework Enters New Phase
Malaysia’s government has withdrawn its appeal against a High Court ruling concerning the regulatory status of liquid nicotine used in vape and e-cigarette products, according to reports by New Straits Times, Free Malaysia Today and CodeBlue on August 18, 2026. The Kuala Lumpur High Court ruled on May 15 that the government’s decision to remove liquid nicotine from the scheduled poisons list under the Poisons Act 1952 was irrational and made without proper consultation with the Poisons Board. The withdrawal ends the government’s appeal process, while the future regulatory framework for nicotine vape products remains under discussion.
Aug.21
FDA Authorizes JUUL2, Cites Adult Switching Amid Efforts to Speed PMTA Reviews
FDA Authorizes JUUL2, Cites Adult Switching Amid Efforts to Speed PMTA Reviews
The FDA authorized the JUUL2 device and tobacco- and menthol-flavored pods on Aug. 28, bringing the number of authorized e-cigarette products to 48. The agency highlighted complete switching among adult smokers, with six-week switching rates reaching 28.4%–49.3% for the menthol pod. The decision comes as FDA works to speed PMTA reviews, reduce application backlogs and expand authorized e-cigarette and nicotine-pouch products while maintaining enforcement priorities for unauthorized products.
Regulations
Aug.29
JT’s Ploom Volumes Rise 43.5% as Cigarettes Anchor Its Transition
JT’s Ploom Volumes Rise 43.5% as Cigarettes Anchor Its Transition
JT’s Ploom heated-tobacco volumes rose 43.5% in the first half of 2026, while combustibles still represented about 97% of its tobacco volume and remained the main earnings base. In Japan, reduced-risk products now account for 48.7% of industry shipments, shifting competition from category adoption towards brand share, pricing and consumer retention. JT’s results offer a revealing case of a traditional tobacco company pursuing a prolonged, dual-track transformation.
JTI
Jul.30
Snowplus Enters Japan’s FamilyMart Network With Zero-Nicotine NEO Line and Kishidan Campaign
Snowplus Enters Japan’s FamilyMart Network With Zero-Nicotine NEO Line and Kishidan Campaign
Snowplus distributor H&S said the zero-nicotine, zero-tar NEO vaping line will begin rolling out across FamilyMart stores in Japan from September 14, 2026, excluding some locations. The DASH line will also be sold at selected FamilyMart stores in southern Kyushu and Okinawa. Snowplus simultaneously named Japanese rock band Kishidan as a brand ambassador, combining convenience-store distribution with a broader consumer marketing push in Japan.
Sep.15