Indonesia to raise cigarette prices by more than a third at start of 2020Reuters | Jakarta | Updated: 13-09-2019 16:40 IST | Created: 13-09-2019 16:36 IST
Indonesia will raise the minimum price of cigarettes by more than a third from January next year, a finance ministry spokesman said on Friday, as part of the government's efforts to reduce smoking rates. 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.
Jakarta kept tobacco taxes flat this year, after raising them by 10%-11% per year in the past five years. Currently, taxes on popular machine-rolled clove cigarettes range from 370 rupiahs to 590 rupiahs a stick, while the floor retail prices range from 715 rupiahs ($0.0512) to 1,120 rupiahs a stick.
The rates for filtered cigarettes, popular among younger Indonesians who dubbed them "white cigarettes", range from 355 rupiahs to 625 rupiahs a stick, while floor retail prices range from 640 rupiahs to 1,130 rupiahs 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 rupiahs ($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. ($1 = 13,960.0000 rupiah) ($1 = 13,960.0000 rupiah)