Impacts of Increasing Tobacco Tax on Workers in Indonesia

According to Antara's report on May 28, Indian union leader Purnomo has warned that the annually increasing tobacco tax is threatening the survival of the cigarette industry and affecting workers. Over the past five years, this tax has accumulated to 67.5%. The high taxes have led to soaring cigarette prices, resulting in the widespread proliferation of illegal cigarettes in society.

Purnomo warned that legal cigarette companies could disappear due to being unable to compete with illegal cigarettes. Therefore, the government must consider the industry's capacity to bear the burden when raising tobacco taxes. Reiterating this point, Purnomo called on the government to stop raising tobacco taxes by 2025. He hopes that doing so will continue to increase job opportunities.

Union leaders have indicated that if the tobacco industry is doing well, the number of workers may increase. For example, in the Indonesian hand-rolled cigarette industry (SKT), a tobacco tax policy supported the hiring of workers. Additionally, in his organization RTMM, two companies have increased their staff, employing around 5000 workers. This has played a significant role in reducing unemployment in Indonesia, especially in heavily populated areas like East Java.

On the other hand, Mike Verawati Tangka, Secretary General of the Indonesian Women's Alliance, pointed out that about 90% of workers in the cigarette industry are women. However, she has yet to see the government play a significant role in addressing and protecting the rights of female workers in the industry. Her concern is based on the heavy dependence of the cigarette industry on government policies. The annual increase in tobacco taxes may directly impact production maintenance, but also threaten the livelihood of workers. Therefore, she hopes that raising tobacco taxes should not only be considered from a financial and inflation perspective, but also from the perspective of its impact on workers.

Mik also hopes that the government will consider workers and other areas that will be affected by the tobacco tax policy when implementing it. She is concerned that raising tobacco taxes could not only lead to financial difficulties but also result in companies laying off a large number of employees. She hopes that the tobacco tax policy will take into account tobacco farmers, as they may also have female workers in the tobacco fields.

In addition, Mick believes that increasing tobacco taxes could also have a wider negative impact on the cigarette industry and surrounding environment, such as large-scale layoffs of employees. She emphasizes that if tobacco taxes are increased, the impact on employee welfare must be considered. This policy not only affects workers' welfare and livelihood stability, but may also have an impact on their families and surrounding communities.

In conclusion, Mike emphasized that the government must consider the fate of workers when formulating policies, rather than just focusing on macroeconomic interests or solely on economic growth. "The country must also recognize that good economic growth is built on the foundation of employee welfare.