The Tobacco Product Industry (IHT) is one of the strategic national industries that have a large share in the Indonesian economy. IHT has a broad business chain that creates added value as well as employment, both directly and indirectly. Moreover, Indonesian kretek tobacco products are unique and unique compared to other countries' IHT products. Still has a dependency on imported raw materials, IHT is still able to absorb large amounts of local raw materials (tobacco and cloves). IHT is the only industry that contributes the most to state revenues through excise and other taxes. Excise is the third largest state revenue, and 95 percent comes from excise on tobacco products (CHT).
The magnitude of the potential contribution of CHT, has led to an increasingly excessive excise policy. CHT is actually more oriented towards achieving revenue targets, rather than controlling or limiting the consumption of cigarettes. As a consequence, the design of excise policies that are changing almost every year through the PMK instrument, has the potential to create uncertainty and threaten the sustainability of the IHT. The latest regulation, PMK 146/2017 is quite a polemic for IHT stakeholders. Because, PMK does not only regulate the increase in excise tariffs, but also raises a "road map for simplifying the excise tariff structure". Even though the authority of PMK should determine CHT. While the roadmap for simplifying the CHT structure should be authorized and involve technical ministries, both the Ministry of Industry and Agriculture. Whereas the Ministry of Industry's IHT road map has been revoked by the Supreme Court's (MA) decision.
On that basis, INDEF held a bimonthly discussion with the theme "Post-PMK 146/2017: Tobacco Industry". This discussion aims to find proportional and equitable perspectives, solutions, and alternative policies, so that the strategic role of sustainable IHT is still optimal.
