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High cigarette excise ‘significant blow’ to employment in E.Java: Governor
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Prime product -- A worker gathers cigarettes at a factory in Surabaya, East Java, on Monday. East Java governor Soekarwo says 6.1 million people in the province depend on tobacco for their livelihood. (thejakartapost.com/Wahyoe Boediwardhana)
E
ast Java Governor Soekarwo has said a proposed significant increase in cigarette excise, which may lead to skyrocketing cigarette prices, poses a significant challenge to employment in the province.
He opined that raising cigarette prices would not succeed in reducing tobacco use among young people.
Soekarwo said around 6.1 million people in East Java depended on tobacco for their livelihood. The province’s locally generated recurring revenue (PAD) from cigarette excise is high, he went on.
The governor further explained that East Java received Rp 2.2 trillion (US$166.45 million) in PAD from cigarette excise every year, with 30 percent of the revenue going to the provincial administration and the remainder to the 38 regencies and municipalities across the province.
“East Java contributes Rp 100 trillion in cigarette excise to the central government annually and only Rp 2.2 trillion of the total money is returned to the province,” he noted.
The head of the Economy and Health Policy Study Center at the University of Indonesia’s School of Public Health, Hasbullah Thabrany, was the first to propose a significant increase in cigarette excise, with the aim of seeing cigarette prices reach up to Rp 50,000 per pack from the current price of less than Rp 20,000 on average.
Finance Minister Sri Mulyani Indrawati said on Monday that the government had not yet issued any policy either on retail cigarette prices or cigarette excise.
Vice President Jusuf Kalla meanwhile said increasing cigarette retail prices could help cut the number of smokers in Indonesia. (ebf)
