Come 2012 and smokers in Indonesia will feel a big pinch in their pocket as they will have to cough up more money to buy cigarettes. The Indonesian government plans to raise excise duty on tobacco by 15 percent in an effort to reduce its consumption for protecting public health, Xinhua quoted a media report as stating.
Indonesian Finance Minister Agus Martowardojo told lawmakers in the parliament building that the new excise would be higher than inflation because the ministry wished to ensure that the excise can protect people’s health.
“We have involved many parties, including the stakeholders and we also have consulted with the House about increasing the excise,” the Jakarta Post quoted the minister as saying.
According to Hasan Aoni Azis, corporate communications officer for The Indonesian Cigarette Producers Association (Gappri), the excise would reduce cigarette consumption because it’s related to people’s purchasing power. “When the excise goes up then cigarette price per pack will increase as well. People will only have two choices: quit smoking or shift their choices to a lower-priced brand,” he said.
As per data from the World Health Organisation (WHO) and the UN Food and Agriculture Organisation (FAO), every 10 percent of excise increase in developed countries could reduce consumption from four to five percent, while in developing countries the reduction could be between 8 and 13 percent, he added.