Nearly 70% of adults smoke in Indonesia, according to the World
Health Organization - one of the highest rates in the world - and
tobacco kills 225,720 people each year in the country or 14.7% of
all deaths, mostly through cardiovascular diseases, the WHO said in
a 2018 report.
The Indonesian government has been raising taxes on tobacco products
almost every year since 2014 to cut consumption, but that has not
had a significant impact on smoking rates.
From Jan. 1 next year, the government will raise the minimum price
of cigarettes across categories by an average of 35% and increase
the excise tax on tobacco products by 23%, finance ministry
spokesman Nufransa Wira Sakti said.
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The largest cigarette companies in Indonesia include HM Sampoerna,
Gudang Garam and unlisted Djarum Group.
Sampoerna, Gudang Garam and Djarum did not immediately respond to
requests for comment.
Jakarta kept tobacco taxes flat this year, after raising them by
10%-11% per year in the past five years.
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Currently, taxes on popular machine-rolled clove cigarettes range
from 370 rupiah to 590 rupiah a stick, while the floor retail prices
range from 715 rupiah ($0.0512) to 1,120 rupiah a stick.
The rates for filtered cigarettes, popular among younger Indonesians
who dubbed them "white cigarettes", range from 355 rupiah to 625
rupiah a stick, while floor retail prices range from 640 rupiah to
1,130 rupiah a stick.
Rules on tobacco taxes are often controversial in Indonesia, where
big tobacco companies often say a decline in sales hurt the
livelihood of farmers.
Indonesia aims to collect 172 trillion rupiah ($12.32 billion) of
revenue from tobacco excises in 2020, according to government
proposals for next year's state budget which is awaiting
parliamentary approval.
(Reporting by Gayatri Suroyo and Maikel Jefriando; Additional
reporting by Fanny Potkin; Editing by Susan Fenton)
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