Indonesian)Tobacco)Excise) Policy)as)TC)Instrument ! - PowerPoint PPT Presentation

Indonesian)Tobacco)Excise) Policy)as)TC)Instrument ! Abdillah)Ahsan)) Researcher! Demographic!Ins1tute!–!! Faculty!of!Economics,!University!of!Indonesia!! Coordinator!! Southeast!Asia!Inia1a1ve!on!Tobacco!Tax!(SITT)! Indonesia!! ! ahsanov@yahoo.com!! Abdillah!Ahsan!ahsanov@yahoo.com!

The)Problem)) Increasing)Adult)(15+))Smoking) Increasing)Youth)(15C19)) Prevalence)) Smoking)Prevalence) • 1995:!7%! • 1995:!27%! • 2007:!19%! • 2011:!36%! Increased!more!than!2X!! • Adult!Male!Smoking! • Male!:! Prevalence!:! 1995:!14%! 1995:!53%!(1!of!2!male!smoke)! 2007:!37%! 2010:!67%!(2!of!3!male!smoke)! Increased!more!than!2X!! • Adult!Female!Smoking! • Female!:! Prevalence:!! 1995:!0.3%!! 1995:!1.7%! 2007:!1.6%! 2010:!4.5%!! Increased!more!than!5X! Increase!more!than!2X!! ! Source!:!! Na1onal!Socio!Economic!Survey!1995,!2001,!and!2004! Basic!Health!Reseaech!2007!and!2010.!GATS!2011! Abdillah!Ahsan!ahsanov@yahoo.com!

Increasing)Number)of)Smoker)) • 1995:!34.7!Million! • 2007:!65.2!Million! Increased!88%! • Male) 1995:!33.8!Million! 2007:!60.4!Million! Increased!79%! • Female)) 1995:!1.1!Million! 2010:!4.8!Million! Increased!more!than!4!1mes! Source!:!! Susenas!1995,!2001,!dan!2004!dan!Riskesdas!2007!! • Proyeksi!Penduduk!Bappenas! • !

Burden)of)Major)Tobacco)AKributed) Diseases)in)Indonesia)) 2010!! • 12.7%!of!mortality!due!to!tobacco!a\ributed! diseases!! • Male! !:!100,680! • Female! !:!89,580! • Total! !:!190,260! ! Source!:!Soewarta!Kosen!2012!

Opportunity)Lost)of)CigareKe)ConsumpPon) Among)The)Poor)) • 2009:!Poorest!HH! expenditure!for!Cigare\e! rank!is!the!2nd!highest.! The!highest!expenditure! is!for!Grains!!! • 11X!!>!Meat!Expenditure! • 6X! !!>!Educa1on! Expenditure!! • 5X! !!>!Milk!and!Egg! expenditure!!

The)System)) The)Goals)) The)Goals)) Based!on!Excise!Law!No.!39!Year! • Cheap!cigare\e!price! ! ! • 2007:! decrease!consumer! 1. It’s!consump1on!needs!to!be! ra1onality! ! !they!will!treat! controlled,! cigare\e!as!a!normal! 2. It’s!circula1on!need!to!be! product!(usefull!and!has!no! monitored,! health!effect)! ! !cigare\e! 3. It!has!nega1ve!impact!on!!society! consump1on!increase! or!environment,!and! 4. It!was!charged!for!the!sake!of! • Tobacco!excise!↑! " ! fairness!and!balance.! cigare\e!price!↑! " ! The!tobacco!excise!policies!is!designed! consumer!ra1onality!↑! " ! to!control!cigare\e!consump1on.!! Cigare\e!consump1on! The!success!of!the!cigare\e!tax!policy! DECREASE! is!determined!by!its!ability!to!control! the!consump1on!of!cigare\es.!! Abdillah!Ahsan!ahsanov@yahoo.com! !

The)Tobacco)Excise)System)in)Indonesia)) 2010 2011 2012 Ret.%Price% Excise% Ret.%Price% Excise% Ret.%Price% Excise% Range%% tariff% %%Ret% Range%% tariff% %%Ret% Range%% tariff% %%Ret% %increase% Type%of%Cigarette% Production%Group% (Rp) (Rp) Price%% (Rp) (Rp) Price%% (Rp) (Rp) Price%% tariff 1 310 325 49 >#660 355 9 >##660 47 >##660 54 >%2% I 2 300 315 345 10 ##630#,##660 47 ##630#,##660 49 ##630#,##660 53 Billion% Machine%Made% 3 280 295 325 10 #600#,##630 46 #600#,##630 48 #600#,##630 53 kretek%(SKM) 4 230 245 57 >430 270 10 >#430 53 >#430 63 %≤2% II 5 195 210 52 374#,#430 235 12 #380#,##430 48 #380#,##430 58 Billion% 6 155 170 38 #374#,#380 41 #374#,#380 45 0 7 310 325 54 =>#375 365 12 >600 52 >600 61 >%2% 8 I 275 295 24 450#,#600 52 450#,#600 56 0 Billion% White%Cigarette%% 9 225 245 49 375#,#450 55 375#,#450 59 0 10 (SPM) 200 215 235 9 >300 67 >300 72 >300 78 %≤2% 11 II 165 175 190 9 254#,#300 60 254#,#300 63 254#,#300 69 Billion% 12 105 110 125 14 217#,#254 45 217#,#254 47 217#,#254 53 13 >590 215 36 >590 235 40 255 43 9 >590 >%2% I 14 550#,#590 165 29 550#,#590 180 32 195 34 8 520,590 Hand%Made% Billion% 15 520#,#550 145 27 520#,#550 155 29 0 26 Kretek%%(SKT)%/% >300% 16 >379 105 28 >379 110 29 >379 125 33 14 Hand%Made% II Million%%P% 17 349#,#379 95 26 349#,#379 100 27 349#,#379 115 32 15 White%Cigarette%% 18 ≤2% 336#,#349 90 26 336#,#349 90 26 336#,#349 105 31 17 (SPT) ≤%300% III 28 28 32 19 Million% =>234 65 =>234 65 =>234 75 15 Average#Excise#Rate# 43 45 51 16 Abdillah!Ahsan!ahsanov@yahoo.com!

The)Gaps)) The)Failure)) The)Next)Step)) • The!success!of!tobacco!tax!policies!is! • Failed!to!increase!the! indicated!with!decreasing!cigare\e! cheapest!cigare\e!price! consump1on.!It!must!be!the!main! • 2008!–!2012! ! !The!cheapest! goal!of!tobacco!tax!policy.!! cigare\e!price!:!IDR!234!per!! • Tobacco!tax!must!be!so!high!that!push! s1ck!(IDR!2,808![USD!30! the!producer!to!increase!the!retail! cent]!/!per!pack!of!12!s1cks)!! price! " !it!will!decrease!cigare\e! • cheapest!price!of!cigare\e! affordability! " !decrease!cigare\e! (IDR!1,000!=!4!s1cks)!!<!price! consump1on!! of!candy!(IDR!1,000!=!3!candy)! • Tobacco!tax!system!must!be! • Failed!to!decrease!cigare\e! simplified!to!shorten!the!price!gap! " ! affordability!! minimize!consumer!subs1tu1on!effect! from!expensive!cigare\e!to!cheaper! • (Cig!Price!x!100)!/!GDP!per! cigare\e! kapita)!!2003!:!6%,!2006!:!3%! Abdillah!Ahsan!ahsanov@yahoo.com!

Abdillah!Ahsan!ahsanov@yahoo.com!