This determination was carried out by the government by considering various things, from the health side, the smoking rate of the community, especially mothers and children, which continues to increase, to the state's financial condition.
However, not all classes or types of cigarettes have their excise rates increased. Only Machine-made Kretek Cigarettes (SKM) and Hand White Cigarettes (SPT) have increased excise rates.
For the SKM category, the excise rose 13.8% -16.9% depending on the group, while for SPM it rose 16.5% -18.4%.
The increase in cigarette excise tax by 12.5% was rejected by tobacco farmers, especially in the midst of the current Covid-19 conditions.
Cigarette entrepreneurs also protested because they were thought to increase the circulation of illegal cigarettes. However, Minister of Finance Sri Mulyani Indrawati has repeatedly emphasized that she will urge the Directorate General of Customs and Excise to increase the enforcement against illegal cigarettes.
However, with these various considerations, the government finally announced an increase in cigarette excise tax at the end of last year.
There are at least four considerations made by the government before increasing cigarette excise:
- Health
The consideration from the health side is to control cigarette consumption, especially among adolescents aged 10-18 years in order to meet the target set at 8.7% in the 2024 RPJMN. Currently, the smoking prevalence of children at this age is at the level of 9.1%.
- Tobacco Workers and Farmers
In terms of workers and farmers, it is to protect workers in the tobacco industry as many as 158.5 thousand people and tobacco farmers as many as 2.6 million people.
Farmers are also part of the supply chain for the cigarette industry, so they should also get attention.
- Press Illegal Cigarettes
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In terms of tariffs, which must also consider the impact of the emergence of illegal cigarettes. This is because every increase in cigarette rates is considered to have the potential to cause violations in the form of illegal cigarettes, whether not using fake ribbons or ribbons.
"Of course, the higher and more extreme this will have the potential to increase the number of illegal cigarettes, so this must be regulated," said Director General of Customs and Excise Heru Pambudi to CNBC some time ago.
- State revenue
The government also considers the contribution of these cigarettes to state revenues. This year, the revenue from CHT is targeted at Rp. 173.78 trillion.
