Indonesia Seeking to Protect Tobacco Jobs

Source from:  tr.itsmyiq.com Aug 21, 2008 08/22/2008

The Indonesian government may leave unchanged the excise duty on cigarettes and tobacco next year to help protect cigarette industry employment, according to a report in The Jakarta Post. The Finance Ministry's director general of Customs and Excise, Anwar Surpijadi, told local reporters on Tuesday he was concerned that a further rise in the rate of excise would damage the cigarette industry and risk the jobs of millions of workers. But Anwar is still expecting the tobacco industry to deliver increased revenues next year on the back of rising sales. Anwar disagrees with local analysts who have suggested that a 60 per cent rise in excise duty would boost state revenue, cut the number of smokers and retain a robust cigarette industry. He said cigarette producers would tolerate an increase in excise if the rise was below the rate of inflation, because smokers would be able to cope with the consequent rise in cigarette prices. "Cigarettes which are harmful to human health are perhaps those that are illegal or those that have high nicotine," he added. "Branded cigarettes have less nicotine." According to the Post report, the livelihoods of 12 million people are directly or indirectly dependent on the tobacco and cigarette sector in Indonesia, which is said to have the lowest average cigarette price in the world. Meanwhile, the chairman of the Indonesian Non-Clove Cigarette Producers' Association, Muhaimin Moefti, was quoted as saying that the government and cigarette producers were agreed that cigarette excise should not rise until at least 2010. This was already stated in the tobacco industry road map for the period from 2007 until 2020, he added. Enditem