Farmers do not Get Impact from Increasing in Tobacco Excise

By : Herry Barus And Aldo Bella Putra | Thursday, October 26 2017 - 20:30 IWST

INDUSTRY.co.id - Jakarta - Chief Executive of the Indonesian Consumers Foundation (YLKI) Tulus Abadi said the farmers will not be affected by the increase in tobacco taxes, let alone the government plans to increase by 2018 only an average of 10.04 percent.

"The enemy of tobacco farmers is actually the cigarette industry behavior that casually determines the quality and price of the tobacco leaves belonging to the farmers," Tulus said through a short message in Jakarta on Thursday (26/10/2017)

Therefore, the appeal of President Joko Widodo for tobacco farmers to plant crops to other plants so as not to be affected by the increase of excise duties that the government is not relevant. Tobacco farmers should be cultivated so as not to continue to be deceived by the tobacco industry.

During this time, the bargaining position of farmers to the price of tobacco leaves is quite weak because the quality and price is determined by the "graders" without a clear measure. The existence of "graders" is more profitable to cigarette industry and harm farmers.

"Moreover, according to Law No. 39 of 2007 on Excise, the excise philosophy is an instrument to control consumption, so the basis of the tax increase plan is only to control consumption," he said.

Tulus himself assessed the 10.04 percent increase in tobacco excise tax is a step backward because the previous year's increase reached 11.19 percent.

"Increase in tobacco taxes should be progressive so that it can reach the number mandated by the Excise Law, which is 57 percent," he said.

The government will raise tobacco taxes an average of 10.04 per cent on January 1, 2018. The decision to raise the tobacco tax is set at an internal meeting led by President Joko Widodo at the Presidential Palace on Thursday (19/10).

According to a World Bank report entitled "Tobacco Tax Reform: Crossroads between Health and Development", the Minister of Finance of a country can save more lives than the Minister of Health by raising cigarette taxes.