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

Russia Adds Vapes to “Strategic Goods” List, Illegal Cross-Border Trade Faces Up to Five Years in Prison
Russia Adds Vapes to “Strategic Goods” List, Illegal Cross-Border Trade Faces Up to Five Years in Prison
Russia will place e-cigarettes and related nicotine products under its “strategic goods” framework from August 20, 2026. According to TVP World’s report published on August 19, the newly listed items include e-cigarettes, electronic smoking devices, vape liquids and nicotine salts. Individuals who illegally move these products across Russia’s customs border or its state border with other Eurasian Economic Union (EAEU) members could face up to five years in prison if shipment values exceed 100,000 rubles (about €1,000), provided all elements of a criminal offence are established.
Aug.20
After Apple Business Decline, South Korea’s ITM Semiconductor Expands KT&G Vape Supply Chain as Vape Revenue Rises 24.8%
After Apple Business Decline, South Korea’s ITM Semiconductor Expands KT&G Vape Supply Chain as Vape Revenue Rises 24.8%
South Korean electronics component supplier ITM Semiconductor is reshaping its business portfolio after a decline in Apple-related protection circuit business, expanding its supply of vape devices and cartridges to KT&G. According to News1 on August 18, 2026, ITM’s vape-related revenue rose 24.8% year on year to 75.5 billion won in the first half of 2026. The company began mass production of vape devices at its Cikarang, Indonesia facility in January 2026, strengthening export manufacturing capacity. Meanwhile, Samsung-related protection circuit sales continued to grow, providing support during the transition.
Aug.20
Product | VAPORESSO Launches PRIX MTL Pod, With NFC Version Linking Interchangeable Panels to On-Screen Animations
Product | VAPORESSO Launches PRIX MTL Pod, With NFC Version Linking Interchangeable Panels to On-Screen Animations
VAPORESSO introduced the PRIX MTL pod system in August 2026 in two versions, Filter and NFC. The Filter version allows users to switch between a conventional drip tip and a filter tip, while the NFC version links interchangeable panels to matching on-screen animations. PRIX features a 2,600mAh battery, a 5.5ml pod, a 0.87-inch TFT display and a maximum output of 40W, alongside Dual Mesh Impact Pods capable of operating at two resistance and power configurations. VAPORESSO's French website lists MSRP at $39.99 for the Filter version and $49.90 for the NFC version.
Market
Aug.24 by 2Firsts Perspectives
KT&G’s Lil Strengthens Market Lead in Korea as Heated Tobacco Share Reaches 47.4%
KT&G’s Lil Strengthens Market Lead in Korea as Heated Tobacco Share Reaches 47.4%
According to South Korea’s UpKorea, KT&G’s heated tobacco brand Lil reached a 47.4% share of Korea’s heated tobacco stick market in the first quarter of 2026. The company is expanding its next-generation products (NGP) business through product development, technology investment and overseas growth. KT&G reported NGP sales of 890.1 billion won (approximately US$650 million) in 2025, up significantly from 279.3 billion won in 2020. Lil products are now available in 34 markets, while KT&G continues building its technology portfolio through patents and multiple product platforms.
Jul.23
Scottish Vape Display Rules Could Cost Businesses £61 Million, Affecting More Than 11,000 Retail Outlets
Scottish Vape Display Rules Could Cost Businesses £61 Million, Affecting More Than 11,000 Retail Outlets
A Scottish government impact assessment estimates that proposed vape display and packaging rules could create up to £61 million ($82 million) in compliance costs for businesses, affecting more than 11,000 retail outlets. The estimated costs are mainly linked to inventory adjustments, retail storage changes and the resources required for businesses to understand and implement the new requirements. The measures form part of the UK’s broader efforts to tighten vape regulation, particularly around product displays, packaging and sales practices.
Aug.10
Product | JTI Expands Ploom Ecosystem as LYO Tobacco-Free Nicotine Sticks Roll Out Across Europe
Product | JTI Expands Ploom Ecosystem as LYO Tobacco-Free Nicotine Sticks Roll Out Across Europe
Japan Tobacco International (JTI) is expanding its Ploom heated product ecosystem with LYO tobacco-free nicotine sticks. Designed specifically for Ploom devices, LYO contains nicotine but no tobacco. Public information shows that the product has gradually entered several European markets, including Spain, Portugal and Germany, and was officially introduced in Romania in July 2026. The launch highlights JTI’s efforts to explore broader nicotine consumable formats beyond traditional tobacco-based sticks.
JTI
Jul.21 by 2Firsts Perspectives