INDONESIA
A proposed new bill in Indonesia’s parliament that could lead to a sharp increase in the country’s tobacco output to 524 billion cigarettes by 2020 has not been killed yet, despite the government’s earlier claim that it would.
Under the draft law, manufacturers of tobacco products will have to use locally sourced tobacco for at least 80% of their production, while imports of ready-to-use cigarettes may be subject to an excise tax of 200%.
On March 18, the deadline for the government to respond to the House of Representatives, the Joko “Jokowi” Widodo administration made a last-minute decision and sent a presidential letter (Surpres) to the House, saying it would agree to discuss the House’s initiative. The letter was sent just three days after cabinet secretary Pramono Anung announced that a cabinet meeting held on March 14 had concluded that the bill was unnecessary.
It was unclear what changed the government’s stance at the 11th hour, but the decision came about amid threats from the House’s legislation body (baleg) that it would reject government-proposed bills in retaliation for the government’s refusal to agree to a deliberation on the tobacco bill.
In the letter, President Jokowi assigned trade minister Enggartiasto “Enggar” Lukita, health minister Nila Moeloek, industry minister Airlangga Hartarto, and finance minister Sri Mulyani Indrawati to discuss the bill with the House.
Firman Subagyo, the parliament member who initiated the bill, said that tobacco is a “strategic” commodity that can increase the prosperity of Indonesian farmers and state revenues. “Health should not be used as an excuse to destroy people’s livelihood,” he said.
Nila Moeloek, Indonesia’s health minister, said her ministry opposes the tobacco bill as it has the responsibility to safeguard the health of the people, while industry minister, Airlangga Hartarto, said the government should assess how the tobacco bill would affect existing regulations for the industry. Indonesia Tobacco Growers’ Association board member, Abdus Setiawan, said he welcomed the draft law as it could help protect farmers, but an increase in production should be balanced with rational pricing.