Ahead of 80th Independence Anniversary, Indonesia Urged to Raise Tobacco Tax for Health and Fiscal Self-Reliance

Jakarta, MINA – As Indonesia approaches its 80th Independence anniversary, the nation is reminded of the powerful message: “United, Sovereign, Prosperous People, Advanced Indonesia.”

The occasion is seen as the right moment to take bold policies that protect public health while strengthening fiscal resilience. One strategic step proposed is a significant increase in tobacco excise rates in 2025.

Chairperson of the Center of Human and Economic Development ITB Ahmad Dahlan Jakarta (CHED-ITB AD), Roosita Meilani Dewi, said raising tobacco taxes is a smart policy with two major benefits: investing in public health and reinforcing the country’s fiscal foundation.

She explained that World Health Organization (WHO) data shows tobacco related non communicable diseases, such as heart disease, stroke, and cancer, continue to rise and burden the health budget, with the BPJS Health deficit reaching Rp 25 trillion in 2019.

Also Read: Israel Reportedly in Talks with Indonesia to Resettle Gaza Residents

According to Roosita, citing WHO studies in her written statement received by MINA in Jakarta on Thursday, tobacco tax hikes have proven effective. Every 10% increase in price can reduce consumption by 4–8%, especially among teenagers, children, and low-income communities.

“Higher cigarette prices will cut off youth access to tobacco products, reduce the number of new smokers, and encourage quitting,” she said.

From a fiscal perspective, Roosita noted that tobacco excise revenue has been a vital source for the state budget over the past decade, reaching Rp 218.6 trillion in 2022. Although it declined in 2023, the trend rebounded in 2024. These funds can be allocated to the National Health Insurance (JKN) and anti-smoking campaigns, creating a positive cycle for public health.

However, she added, tobacco tax policy is not without challenges. The phenomenon of “downtrading,” or switching to cheaper cigarettes, is evident: the market share of Machine-Rolled Kretek Cigarettes in Tier I fell from 63% (2015–2018) to 30% in June 2025, while consumption of cheaper Hand-Rolled Kretek Cigarettes increased.

Also Read: Indonesia Reaffirms Unwavering Support for Palestine

Industry concerns about job losses are not entirely justified, she argued, as the sector employs only about 0.5% of the national workforce. The risk of illegal cigarette circulation can also be curbed through strict monitoring and technology such as digital stamps.

At the age of 80 years of independence, raising tobacco taxes is considered not merely a fiscal policy, but a patriotic act to build a healthy, productive, and economically self-reliant Indonesia.

“Independence means freedom from addiction, health for productivity, and fiscal self-reliance,” Roosita stressed, urging the government to take aggressive steps in 2025 for the nation’s future. [Nia]

Mi’raj News Agency (MINA)

Also Read: Beach Mosque Cultural Festival in Bali, Maritime Traditions and Islamic Values Harmony