The Indonesian government has announced that the sale of second-hand loose cigarettes will be banned by 2023. Presidential Regulation No. 25 of 2022 has outlined the drafting of government regulations for implementation in 2023.
However, this plan faced significant resistance from both retailers who buy from wholesalers and smokers.
In addition, it also calls for the government to supervise whether the ban is actually implemented. For example, Tulus Abadi, Chairman of the Executive Committee of the Indonesian Consumer Foundation (YLKI), explained the situation of the ban on the sale of hand-rolled cigarettes.
He said, "This is a policy that should be appreciated because it is one of the effective control methods for reducing the smoking rate in Indonesia, particularly among impoverished families, children, and adolescents.
He revealed that the ban on ketone drugs sales is also effective in boosting the revenue from cigarette consumption tax. So far, increasing the consumption tax has not effectively reduced the prevalence and consumption of cigarettes, as cigarettes are still predominantly sold based on ketones and marketed like candy, so prices are affordable.
The ban on the sale of handheld cigarettes also aligns with the spirit of Law No. 39/2007 on consumption tax. The Consumption Tax Law states that products that cause addiction and have negative effects on users and the environment are subject to sales restrictions. However, it is essential to monitor the actual implementation and sanctions for violators. The speaker warned against letting the ban on the sale of Kretek cigarettes become toothless.
According to the Indonesian Market Traders Association (APPSI), a sales ban could erode the income of vendors, given the weakened purchasing power of the public.
According to Mujiburrohman, Secretary General of APPSI, it is predicted that revenue will decrease by more than 30%. He explained that this decline is due to cigarette sales being the biggest contributor to stall income after food sales.
Buying and selling cigarettes requires a significant amount of capital, but the profit margins are generally low. According to a source, booths or stores that sell cigarettes by the pack may only see revenue in the range of 5-10% of the sales price, while those who typically sell cigarettes wholesale may only receive a profit margin of 1-3%.
The Association of Indonesian Street Vendors (APKLI) is preparing to send an open letter to President Joko Widodo.
APKLI President Ali Mahsun explained that cigarette retail has always been one of the main sources of income for street vendors. Therefore, the argument for this ban will significantly reduce the income of street vendors.
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