Indonesian Tobacco Industry Protests Government Regulations as Threats Emerge

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Indonesian Tobacco Industry Protests Government Regulations as Threats Emerge
Indonesian tobacco industry protests government regulation threatening tobacco trade, citing significant contributions to national revenue.

According to Indonesian media Detik Finance on May 7th, the Indonesian White Cigarette Industry Association (Gaprindo) has protested against the government regulations on tobacco products set by the Ministry of Health. The regulations are feared to threaten the tobacco industry, which has been contributing to the country's treasury revenue.


The President of the National Association, Benny Wachyudi, stated that the most controversial regulation is the ban on selling tobacco within 200 meters of educational institutions. "The government is preparing to implement regulations related to both the modern and traditional markets, especially in terms of display and location, with specific prohibitions on market locations within 200 meters of schools or educational institutions.


Despite the strengthened tobacco control measures, the government is still collecting tobacco taxes. Bani stated that tobacco tax revenue reached 2.18 trillion rupees in 2023.


Tobacco is a legal product, protected by law, and the taxes we pay on it each year account for 10-11% of the government's revenue, which was 218 trillion rupees in 2023. Tax revenue remains a major source of income for the country. He also added that there are 5 million people employed in this industry.


Chairman of the Indonesian Retailers Association, Roy Nicholas Mandey, mentioned the huge contribution of tobacco taxes to the country's income. The amount of nearly 220 trillion rupees is almost half of the 460 trillion rupees budget for the new capital project. Roy believes that the regulation prohibiting the sale of cigarettes within 200 meters may be interpreted in various ways, and could potentially weaken the tobacco trade sector.


A provision in the health bill is weakening the tobacco trade sector. The provision states that tobacco transactions must be restricted to certain areas, prohibiting trading in places such as educational, religious, and government-mandated locations that require a 200-meter distance. Roy expressed concerns about the methods of determining this provision, including who has the authority to decide. If this provision is enforced, the avenues for tobacco sales will become narrower.


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