The Urgency of Cigarette Excise Policy to Improve Environmental Quality

Warta Ekonomi, Jakarta – The high consumption of tobacco products, especially cigarettes, also has an impact on environmental health. Because cigarette butts contain microplastics that can last a long time in the environment. However, many smokers dispose of their cigarettes carelessly, either by dropping them on the ground, ditches, or sewers. This behavior eventually makes cigarette butts the second largest source of plastic pollution in the world.

Unfortunately, the prevalence of smokers in Indonesia is relatively high, even relatively higher than other countries in the Asian region. The government has indeed taken steps to increase cigarette excise duty and simplify the excise tariff structure, but the Minister of Finance Regulation (PMK) Number 156 of 2018 is considered to hamper the simplification of the excise tariff structure. Although it contributes greatly to the country's economic income, the low price of cigarettes in Indonesia has made the number of smokers soar, which in turn has an impact on the quality of the environment.

This was disclosed by the independent research institute The Prakarsa. In the online training titled Cigarette Tax Allocation for Environmental Improvement organized by the Alliance of Indonesian Journalists (AJI), Program Manager The Prakarsa Herni Ramdlaningrum revealed that tobacco has a detrimental investment because it causes 600 million trees to be cut down, 200 thousand hectares of land is lost to conversion to tobacco plants, 22 billion tons of water is polluted, and 84 million tons of CO2 is released into the air.

In addition, the tobacco industry has also released more than 7.000 toxic chemicals into the environment.

“So, this is a direct impact on the environment which ultimately results in a climate change situation. This has an impact on the occurrence of natural disasters due to climate change and also has an impact on farmers who cannot undergo cropping patterns because of the uncertain climate," said Herni, Thursday (30/6/2022).

Considering its impact on the environment, The Prakarsa assesses the need for a policy to increase cigarette excise prices in order to reduce the level of cigarette consumption among Indonesians.

The conclusion was drawn from the results of their research on 1.440 smokers in six districts, namely Malang Regency, South Lampung Regency, Tangerang Regency, Gowa Regency, Bandung Regency, and Banyumas Regency, in 2018.

The results showed that 31,48% of smokers stated that they would stop smoking if the price of cigarettes increased by 100%. Another 68,52% decided to continue smoking but 30,44% of them would switch to cheaper cigarette brands.

Similar results are also seen in the scheme of increasing the price of cigarettes by 50%. With this scheme, as many as 12,07% will stop smoking and 29,47% of the 87,93% who continue to smoke state that they will switch to cheaper cigarette brands.

“This is the function of increasing cigarette excise. This will have an impact on changing behavior or suppressing cigarette consumption,” explained Herni.

For that, The Prakarsa hope the government can increase excise duty up to 100% for tobacco products. "Indeed, these dangerous goods should be branded with the highest possible price in order to control consumer behavior towards cigarettes," he said.

On the same occasion, Head of the Excise Tariff and Basic Price Section I of the Directorate of Technical and Excise Facilities of DJBC Putu Eko Prasetio admitted that the government is aware of the impact of cigarettes on the environment. According to him, the government has already regulated the tobacco industry, including its relation to the environment.

However, policies related to the tobacco industry need to be studied more deeply and carefully. This is because this industry does not only affect the country's economic income, but also to farmers and workers.

"Government levies from a cigarette include excise duty, cigarette tax, and VAT on HT. Excise is allocated specifically to ameliorate the negative impact of the consumption of these goods and services. But of course, there will be impacts related to this industry and related sectors, namely tobacco farming and labor. This is what the government has prepared in relation to anticipating the impact of the policy of increasing cigarette excise rates," said Putu.

On the other hand, Herni believes that the risks associated with labor in the tobacco industry are not comparable to the negative impacts brought on by cigarettes. 

“We have to be aware of the assumption about how many million workers are predicted by the tobacco industry. This [cigarette] is a dangerous product because of the amount of chemicals that are disposed of carelessly. I think we have to agree that cigarette butts are waste that must be regulated and must be subject to excise duty,” said Herni.

Sumber: NewsEconomy

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