DistantNews
🇮🇩 Indonesia /Crime & Justice

Indonesian Civil Groups Reject New Tobacco Excise Plan, Citing Health and Corruption Risks

From Tempo · (10m ago) Indonesian Critical tone

Translated from Indonesian, summarized and contextualized by DistantNews.

TLDR

  • A coalition of Indonesian civil society groups opposes a government plan to add new tiers to the tobacco excise system.
  • They argue the policy could harm public health, increase corruption opportunities, and encourage

From Jakarta, Tempo's editorial team views the government's proposed expansion of tobacco excise tariff layers with significant concern. While Finance Minister Purbaya Yudhi Sadewa frames this as a move to formalize illegal producers and boost state revenue, our coalition of civil society groups, including CISDI, Seknas FITRA, and Indonesia Corruption Watch, sees a dangerous step backward.

The current condition of the state budget cannot justify adding new excise layers in the name of boosting revenue.

— Gurnadi RidwanSeknas FITRA researcher Gurnadi Ridwan explains the coalition's stance on the proposed tobacco excise policy.

The core issue, as we see it, is the fundamental purpose of excise taxes. They are intended as a tool to control consumption, particularly of harmful products like tobacco. Using them primarily to patch holes in the state budget, or APBN, is a misguided approach that prioritizes revenue over public health. Seknas FITRA researcher Gurnadi Ridwan rightly points out that the current budget situation does not justify adding new layers.

The creation of a new layer could further encourage downtrading.

— Muhammad Zulfiqar FirdausCISDI's Health Economics Research Associate Muhammad Zulfiqar Firdaus discusses the potential impact of the new excise layer on consumer behavior.

Furthermore, the claim that this will effectively bring illegal producers into the formal market is questionable. CISDI's analysis suggests a more complex tariff system could actually encourage "downtrading," where consumers switch to cheaper variants, potentially increasing overall consumption. Muhammad Zulfiqar Firdaus of CISDI rightly questions the policy's effectiveness and warns of uncertainty.

It is unclear whether opening a new tariff layer will actually bring illegal producers into the legal market.

— Muhammad Zulfiqar FirdausCISDI's Muhammad Zulfiqar Firdaus expresses skepticism about the policy's effectiveness in formalizing illegal cigarette producers.

Perhaps most concerning are the potential avenues for corruption and the undermining of public health goals. Indonesia Corruption Watch highlights how new, lower-rate tiers could be manipulated, creating fresh opportunities for illicit gains. This policy risks not only increasing access to cheap cigarettes but also exacerbating long-term health and economic costs for the nation. The government's stated aim of implementation by May 2026, while claiming to crack down on illegal cigarettes, appears to overlook these significant risks.

Instead of encouraging illegal producers to become compliant, this policy risks creating new avenues for corruption.

— Seira TamaraIndonesia Corruption Watch researcher Seira Tamara warns about the potential for increased corruption.
DistantNews Editorial

Originally published by Tempo in Indonesian. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

More Stories

From Our Blog