Indonesia: Tobacco tax hike to fund health system

Indonesia is pledging to raise tobacco taxes to fund its healthcare system, which has been strained by tobacco and COVID-19. Cigarette prices in Indonesia remain among the lowest in the world, significantly contributing to the country's high smoking rate.

The Indonesian Ministry of Finance has issued a decree[1] containing a provision to increase tobacco taxes. Implementing measures that reduce smoking is particularly important in the context of the COVID-19 pandemic. Smoking is a major contributor to noncommunicable diseases (NCDs) and increases the risk of contracting a severe form of the virus.

In addition to tobacco taxes, the decree also includes taxes on foods that contain high amounts of sugar, salt, and fat, which are also risk factors for NCDs. The role of smoking in Indonesia and the coronavirus crisis is particularly concerning given that the country has one of the highest smoking rates in the world: 38% of the population aged 15 and older are smokers. The prevalence of smoking is particularly high among men, where it affects 70% of those aged 15 and older.[2].

Making cigarettes less affordable through increased tobacco taxation is an evidence-based policy set out in the World Health Organization Framework Convention on Tobacco Control (CCLAT) and its implementing guidelines[3]Significant tax increases are a so-called "win-win" measure. Indeed, additional revenue from tobacco taxation can be allocated to strengthening health systems damaged by the tobacco epidemic and the recent pandemic, and these tax increases reduce tobacco consumption.

As of April 2020, 42 Indonesian associations have launched a call to Indonesian President Joko Widodo to urgently strengthen the country's COVID-19 response. These associations advocated for the implementation of a comprehensive set of tobacco control measures proven to be effective. They had requested that the country immediately ratify the WHO treaty, the FCTC. Among the first measures to be implemented, the associations called for tax increases, the introduction of smoking bans in public places, the adoption of broad health warnings on packages, and assistance for smokers to quit. Consumption monitoring is also among the basic measures to be implemented to protect public health, particularly that of the younger generation.

For Dr. Tara Singh Bam, Deputy Director for the Asia-Pacific region at the Union, " The adoption of cThese measures are essential to help Indonesia fight COVID-19 and support its health system, which has been hit hard by the virus. Public health advocates, including those in tobacco control, must now ensure that these measures are effectively implemented. ".