Is the Cigarette Manufacturing Industry Indonesia’s Biggest Sunset Industry? Rising Pressures after the Government Plans to Raise Cigarette Prices
Stakeholders in Indonesia’s cigarette manufacturing industry were not amused when the Indonesian government announced its plans to raise minimum prices of cigarettes and to increase the excise tax on tobacco products per 1 January 2020. Reportedly, the central government plans to raise the excise tax on tobacco products by an average of 23 percent, which will then raise the minimum price of cigarettes across categories by an average of 35 percent.
The cigarette manufacturing industry can be labelled a controversial industry. On the one hand it is now commonly accepted that smoking has very negative consequences for people's health (for both direct and indirect smokers), with in particular cardiovascular diseases being a real risk.
But, on the other hand, the cigarette manufacturing industry is one of the most valuable industries within the Indonesian economy. It creates plenty of employment opportunities for the local population (some claim that in total some 12 million households benefit - directly or indirectly - from the tobacco and cigarette industries) and brings in much-needed government revenue.
This article discusses:
- Indonesia's culture of smoking
- Negative consequences of smoking on Indonesia's health and demographic bonus
- The rising number of female smokers in Indonesia
- The importance of the cigarette manufacturing industry for the Indonesian economy (employment opportunities and state revenue)
- The latest government plan to raise the excise tax on cigarettes (including reactions from stakeholders)
- and more ...
Read the full article in the September 2019 edition of our monthly research report. You can purchase the report by sending an email to info@indonesia-investments.com or a WhatsApp message to the following number: +62(0)8788.410.6944
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