Since 2016, the tobacco excise hike has been disproportionate with the excise revenue growthJakarta (ANTARA) - The government has taken into account several aspects prior to deciding to raise tobacco excise by up to 12 percent in 2022, according to Center for Indonesia Taxation Analysis (CITA) researcher, Fajry Akbar.
An increase in tobacco excise, apart from increasing the national government revenue, also aims to curtail smoking that has proven to be detrimental to health, Akbar remarked.
"Since 2016, the tobacco excise hike has been disproportionate with the excise revenue growth. For instance, despite the excise being increased by one percent, its revenue growth is less than one percent," Akbar told ANTARA in Jakarta, Friday.
The researcher believes that the high level of consumer trust in cigarettes would not significantly reduce smoking despite the rise in tobacco excise.
"Hence, I am convinced that revenue from the tobacco excise will continue to record a positive trend in 2022," he noted.
Although the excise hike will potentially boost state revenues from tobacco products, the increase will not be significant to the entire national revenue, he pointed out.
"This is because the excise increase will be greater than the potential revenue growth, but I believe better control will remedy this discrepancy," Akbar affirmed.
Earlier, Finance Minister Sri Mulyani Indrawati spoke of adopting a fair approach in deciding the tobacco excise hike.
"I need to play it gracefully. Hence, I prepare several plans on the excise hike and its effect. (By increasing the tobacco excise), we will also help combat the threat of illegal cigarettes," Indrawati stated at a talk show hosted by celebrity Deddy Corbuzier.
The minister admitted to any change to the tobacco excise being a highly delicate matter since the process will affect multiple stakeholders with differing interests.
"If the excise hike is too low, the Health Ministry will rebuke me, but if I increase the excise too high, the public will accuse me of being influenced by the Health Ministry and the international community," the minister remarked.
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Translator: Sanya Dinda S, Nabil Ihsan
Editor: Sri Haryati
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