Endang Mulyani, Jakarta – Indonesia's battle against tobacco use is showing little progress, with around 70 million people – based on the 2023 National Health Survey – still actively smoking despite years of excise hikes.
According to the World Health Organization, Indonesia ranks fifth globally in smoking prevalence, with 38.7% of people aged 15 and above using tobacco in 2025. Nauru ranks first, followed by Myanmar, Serbia, and Bulgaria.
Health economists warn that cigarette affordability remains the key issue. Prices have not risen fast enough to deter consumption, even after multiple tax increases.
"Cigarette prices in Indonesia remain relatively cheap, and this has been the case for years. We continue to push for significantly higher tobacco prices," Diah Satyani Saminarsih, founder and CEO of the Center for Indonesia's Strategic Development Initiatives (CISDI), said at a press conference on Thursday.
Data from CISDI show that cigarette affordability – measured by the Relative Income Price (RIP) – has hovered at around 3% for more than a decade. This means Indonesians spend only about 3% of their annual income to purchase 100 packs of cigarettes.
That level has barely shifted between 2010 and 2024, suggesting that income growth has offset the impact of tax increases.
The government has raised tobacco excise regularly, including a 23% hike in 2020 and annual increases of around 10% in recent years. While these measures briefly reduced affordability, the effect was diluted as incomes rebounded during the post-pandemic recovery.
"Price increases have not kept pace with income growth," said Zulfiqar Firdaus, a health economics research associate at CISDI.
Compounding the issue is the wide price gap across cigarette categories. Hand-rolled clove cigarettes (kretek) remain significantly cheaper due to lower excise rates, encouraging smokers to switch to lower-cost products rather than quit (downtrading).
"Excise taxes on hand-rolled clove cigarettes are significantly lower than other cigarette types, and increases over the past five years have been minimal, in some cases even 0%," Zulfiqar said.
CISDI projects that without more aggressive reforms, affordability will remain high through 2027, particularly as regional taxes (10%) and value-added tax (9.9%) are expected to stay unchanged.
The findings come as the government seeks to reduce smoking prevalence, particularly among younger Indonesians, where uptake remains a growing concern.
To address the issue, CISDI has proposed a series of reforms, including more aggressive and uniform annual excise increases, further simplification of the tax structure, and aligning excise rates across cigarette categories.
Source: https://jakartaglobe.id/news/indonesias-70-million-smokers-persist-despite-tax-hike