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

China Tobacco Official Media Releases the 2024 World Tobacco Development Report (Part 1): Nicotine Pouch Sales Increase by 36.9% YoY to 21.23 Billion Pouches
China Tobacco Official Media Releases the 2024 World Tobacco Development Report (Part 1): Nicotine Pouch Sales Increase by 36.9% YoY to 21.23 Billion Pouches
In 2024, global heated cigarette sales hit $38.85 billion, up 12.7% YoY, led by Japan, Italy and Russia. The e-cigarette market reached $23.04 billion, with disposable e-cigarettes up nearly 19% and open-system e-cigarettes at $8.1 billion, paced by the US and France. Traditional oral tobacco sales fell, while nicotine pouches soared 36.9% YoY, making the US the top market.
May.14 by 2FIRSTS.ai
Malaysia to Remove Unregistered Vaping Products by October, Says Health Ministry
Malaysia to Remove Unregistered Vaping Products by October, Says Health Ministry
Malaysia’s Ministry of Health expects to complete the registration and approval process for vaping products by October. Products not included in the official registry will be banned from sale.
Jun.11 by 2FIRSTS.ai
Malaysia’s Health Ministry Clarifies: Ispire Licensed for Nicotine Manufacturing Only, Not for Local E-Cigarette Sales
Malaysia’s Health Ministry Clarifies: Ispire Licensed for Nicotine Manufacturing Only, Not for Local E-Cigarette Sales
Malaysia’s Health Ministry recently clarified that although foreign company Ispire has been granted a manufacturing license to produce nicotine-containing vaping devices, the license is for export purposes only and does not permit local sales. Under the 2024 Control of Smoking Products Act, all e-cigarette products must be registered with the Health Ministry before being sold in Malaysia.
Jun.05 by 2FIRSTS.ai
JTI Reports Strong Sales of Its Nicotine Pouches in the Philippines, Monthly Growth Reaches 23%
JTI Reports Strong Sales of Its Nicotine Pouches in the Philippines, Monthly Growth Reaches 23%
JTI sees strong growth potential for its smokeless nicotine product "Nordic Spirit" in the Philippines, with sales increasing monthly.
May.28 by 2FIRSTS.ai
Imperial Brands 2025 Interim Report: NGP Net Revenue Up 15.4%, Pulze 3.0 Heated Tobacco Device to Launch in H2
Imperial Brands 2025 Interim Report: NGP Net Revenue Up 15.4%, Pulze 3.0 Heated Tobacco Device to Launch in H2
Imperial Brands has released its 2025 half-year results, reporting total revenue of £14.604 billion, down 3.1% year-on-year. Net revenue from next-generation products (NGPs) rose by 15.4%. The company's oral nicotine brand Zone has seen early success in the U.S. market, and development of the Pulze 3.0 heated tobacco device is complete, with a launch planned in key markets during the second half of the year.
May.14 by 2FIRSTS.ai
Malaysia’s Kedah State to Ban All Vape Sales, Retailers Ordered to Shut Down by Year-End
Malaysia’s Kedah State to Ban All Vape Sales, Retailers Ordered to Shut Down by Year-End
Malaysian state of Kedah orders e-cigarette businesses to cease operations by December, citing public health and drug threats.
May.23 by 2FIRSTS.ai