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 adult men 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. The largest cigarette companies in Indonesia include HM Sampoerna, Gudang Garam and unlisted Djarum Group.
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. ($1 = 13,960.0000 rupiah) ($1 = 13,960.0000 rupiah)
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