In 2017, the government of the Southeast Asian nation has already implemented taxes on all tobacco products, ranging from a low 22 rupiah per single cigarette for the traditional “rokok klembak”, to a significant 110,000 per stick for cigars. This equated to an average increase of 10.5% from 2016.
According to an article on Reuters, the coordinating Minister of Economics Darmin Nasutionin said that in the coming year the excise tax rates will be increased by a further, 10.04%. The aim is to raise the sum of 155.4 trillion rupiah of revenue from taxes in 2018, most of it from tobacco taxes.
Do increased tobacco prices motivate smokers to quit?
Besides the obvious revenue advantages for the government, some scientists would agree that increasing tobacco prices serves to deter people from smoking. In fact, a recent US study suggests that just adding $1 to the current price of a packet of cigarettes ‘could help millions of smokers quit’.
“Our finding that increases in cigarette prices were associated with quitting smoking in the older population suggests that cigarette taxes may be a particularly effective lever for behaviour change,” said Dr Stephanie Mayne, who led the study at Drexel University in Philadelphia.
Seasoned smokers tend to switch to cheaper products
The research which was published in the journal Nicotine & Tobacco Research pointed out that smokers on a budget have several options, including cheaper cigarette brands and roll-your-own tobacco. Hence increasing cigarette prices may not necessarily encourage smokers to quit, but just prompt them to switch to cheaper brands or products.
