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Jakarta Post

Economist criticizes government's backtracking on cigarette excise

  • News Desk

    The Jakarta Post

Jakarta   /   Wed, November 7, 2018   /   02:31 pm
Economist criticizes government's backtracking on cigarette excise University of Indonesia economist Faisal Basri (The Jakarta Post/vny)

University of Indonesia economist Faisal Basri has criticized the government’s decision to renege on a planned increase of the cigarette excise by around 10 percent next year, saying the health cost triggered by smoking was far higher than the revenue collected from the tax.

Some health experts, who have called for a more drastic increase in the cigarette excise, estimate that 30 percent of the Healthcare and Social Security Agency's (BPJS Kesehatan) spending goes to curing tobacco-related diseases.

“BPJS Kesehatan’s spending would be much lower if fewer people consumed cigarettes,” said Faisal in Jakarta on Tuesday during a press conference together with the National Tobacco Control Commission (Komnas PT), as quoted by kontan.co.id.

He said cigarettes also ensnared poor people in poverty, as a survey showed that their spending on cigarettes (10 percent of their income) was second only to their spending on rice (27 percent).

“People spend six times more on cigarettes than on sources of protein,” he said, adding that the contribution of cigarettes to state revenue was only equal to about 0.9 percent of the economy.

He underlined the impact of cigarettes on minors. Citing the results of a recent survey, he said cigarette consumption among underage people had increased from 7.2 percent in 2013 to 9.1 percent in 2018 and would negatively affect the country’s human capital index (HCI).

“If we want to develop the economy based on high human capital, we need to eliminate any disruption of the efforts to improve human capital,” he added. (bbn)