Tobacco products in Indonesia

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Tobacco Industry is a road map of the regulations relating to all tobacco products in Indonesia . [1] Tobacco Industry (TI) contains guidelines and industry classification and the products produced by the tobacco industry in Indonesia, including regulations, policies ribbon and excise, tobacco industry strategies, so on and so forth. [1] Tobacco Industry was first coined by the Directorate General of Agro and Chemical Industry Department in 2009. [1] Tobacco Industry has a significant role for state revenue through taxes and excise, employments, and protection against multiple impacts of tobacco farmers and others. [2] The development of the TI also consider public health in addition to concern on, so that the industry can grow well. [2] TP is a labor-intensive industry, so to the present of TI and its association with upstream form the procurement of raw materials, particularly tobacco, cloves, and other industries are potential labor-absorbing industrial. [2]

Contents

Classification

Tobacco Industry also classify into three groups, namely : [1]

Upstream Industry Group

In Indonesia Standard Industrial Classification (ISIC) 2005, Tobacco Industry classified in Upstream Industry Group is Drying and Processing Tobacco Industry (ISIC 16001). [1] This groups include the field operations fogging and cutting-process-leaves tobacco. [1]

Between Industry Group

Tobacco Industry belonging to Reuters that Condiment Industry Cigarettes and other equipment (ISIC 16009), includes: cigarette flavoring and the other cigarette completeness such as klembak incense, cigarette sauce, uwur, klobot, kawung and manufacture of filters. [1]

Downstream Industry Group

Tobacco Industry that included in the Downstream Industry Group, such as: Cigarettes Industry (ISIC 16002), White Cigarette Industry (ISIC 16003) and other Cigarette Industry (ISIC 1600) includes cigars, cigarettes, incense and cigarettes klembak klobot/kawung. [1]

Strategy and policy

Tobacco is one industry that contributes significantly to the revenues and also provide ample work opportunities for the community. [3] On the other hand, the result of the tobacco industry also have negative effects for public health aspects. [3] Therefore, any policies against tobacco industry ought to consider some aspects that are opposite to each other. [3] In this case, the government has established the Tobacco Industry Road map drawn up jointly between the stakeholders concerned. [3] The outline policy goals tobacco excise rates in 2013 also has to consider the elements contained in the Road map that referred to. [3]

In this context, details of a period of time to achieve those objectives have been outlined in the planning sequence as follows:

Realization of Tobacco Industry strong and competitive in the domestic and global markets with attention to health aspects.

Policy direction

In order to achieve its goals for the development of national industry through triple track (pro-growth, pro-job, pro-poor), then the policy is directed at the development of TP:

Indicators of achievement

Problems facing Tobacco Industry

Tobacco Industry has remained an important role in growing the national economy, especially in the area of tobacco, cloves and cigarette production centers, among others, in growing industries/related services, the provision of agri-business field and employment. [4] In the economic crisis, the TP is able to survive and neither conduct Termination of Employment (FLE), even this industry is able to provide a significant contribution to state revenue. [4] In its development, the economic aspect is still a major consideration with regard to health impacts posed. [4] Tobacco Industry has priority to be developed for processing natural resources, large enough to absorb labor either directly or indirectly, so as to contribute to state revenue (excise). [4] Nevertheless, faced with today's TP issues include the impact of smoking on health issues both at the global level which is sponsored by the WHO as stated in Framework Convention on Tobacco Control (FCTC) and the national tobacco control set out in PP 19 of 2003 on securing of cigarettes for health. [4] In addition, the TP is also faced with the excise policy issues that are not well-planned, it is not transparent and is more oriented towards the increase in state revenue without considering the ability of the tobacco industry and people's purchasing power, increased production and circulation illegal cigarettes. [4] It is also the main problem is not the realization of the tobacco industry climate distorted competition, the supply of tobacco that does not meet the requirements and low quality. [2] Each of these issues makes the appearance of the TP is currently not optimal. [2] Climate uncontrolled competition resulted in the TP, particularly middle-class tobacco industry need protection from the government in order to grow. [2] As well as the main raw material (tobacco and clove) still do not have the standard technical specifications as required industry. [2] Consequently, the industry must bear the cost of re-grouping in order to be properly utilized in industrial processes. [2]

Contributions to GDP

As one source of state income, excise has a very important contribution in the budget, especially in a group of Domestic Revenue. [5] Customs receipts collected from three types of goods, namely; ethyl alcohol, beverages containing ethyl alcohol and tobacco products to revenue as reflected in the State Budget is increasing from year to year. [5] In the 1990–1991, tax revenue was only Rp 1.8 trillion or contributes about 4 percent of domestic revenue, in the 1999–2000 the number has increased to Rp 10.4 trillion, accounted for 7.3 percent of domestic revenue. [5] In 2003, the tax revenues were set at Rp 27.9 trillion or 8.3 percent of domestic revenue. [5] Indonesia accounted for 2.1% of the stock of tobacco in the world. [6] Tobacco Industry to contribute to state revenue through excise. [6] In terms of state revenue in the form of foreign exchange, the value of exports of tobacco and tobacco products also plays an important role. [6] Tobacco Industry has contributed greatly to employment as well as one of the objects that can be used as a source of revenue associated with Tobacco Excise. [6] More specifically, the cigarette industry has contributed most to the Indonesian state budget, the value contribution of excise duty for the year amounted to 35 trillion RP with a total production of 180 billion cigarettes (data GAPRI ytd September 2008). [7] The cigarette industry is promising with an average growth of 5-7% / year (TEMPO Interactive, December 10, 2008). [7] Within a production of it when converted to the number of consumers, there are approximately 41 million people (assuming average smokers spend one pack/day). [7]

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The economy of Indonesia is one of the emerging market economies in the world and the largest in Southeast Asia. As an upper-middle income country and member of the G20, Indonesia is classified as a newly industrialized country. Estimated at over 21 quadrillion rupiah in 2023, it is the 16th largest economy in the world by nominal GDP and the 7th largest in terms of GDP (PPP). Indonesia's internet economy reach US$77 billion in 2022, and is expected to cross the US$130 billion mark by 2025. Indonesia depends on the domestic market and government budget spending and its ownership of state-owned enterprises. The administration of prices of a range of basic goods also plays a significant role in Indonesia's market economy. However, since the 1990s, the majority of the economy has been controlled by individual Indonesians and foreign companies.

<span class="mw-page-title-main">Tobacco</span> Agricultural product processed from the leaves of plants in genus nicotiana

Tobacco is the common name of several plants in the genus Nicotiana of the family Solanaceae, and the general term for any product prepared from the cured leaves of these plants. More than 70 species of tobacco are known, but the chief commercial crop is N. tabacum. The more potent variant N. rustica is also used in some countries.

<span class="mw-page-title-main">Tobacco industry</span> Persons and companies that produce tobacco-related products

The tobacco industry comprises those persons and companies who are engaged in the growth, preparation for sale, shipment, advertisement, and distribution of tobacco and tobacco-related products. It is a global industry; tobacco can grow in any warm, moist environment, which means it can be farmed on all continents except Antarctica.

<span class="mw-page-title-main">Economy of the Comoros</span>

The economy of the Comoros is based on subsistence agriculture and fishing. Comoros has inadequate transportation links, a young and rapidly increasing population, and few natural resources. The low educational level of the labor force contributes to a subsistence level of economic activity, high unemployment, and a heavy dependence on foreign grants and technical assistance. The Comoros, with an estimated gross domestic product (GDP) per capita income of about $700, is among the world's poorest and least developed nations. Although the quality of the land differs from island to island, most of the widespread lava-encrusted soil formations are unsuited to agriculture. As a result, most of the inhabitants make their living from subsistence agriculture and fishing. Average wages in 2007 hover around $3–4 per day.

<span class="mw-page-title-main">Japan Tobacco</span> Japanese cigarette manufacturing company

The Japan Tobacco Inc. (JT) is a Japanese diversified tobacco company. It was established in 1985 as a tokushu gaisha that inherited the right to monopolize and manufacture cigarettes from the Japan Tobacco and Salt Public Corporation and required the government to hold at least 50% of its shares. In addition to tobacco, JT diversified its businesses, establishing the pharmaceutical research institute in 1993 and making a full-scale entry into the food and beverage industry in 1998. In 2008, it acquired the food manufacturer Katokichi, now TableMark, as a wholly-owned subsidiary, integrating its food business.

Excise tax in the United States is an indirect tax on listed items. Excise taxes can be and are made by federal, state and local governments and are not uniform throughout the United States. Certain goods, such as gasoline, diesel fuel, alcohol, and tobacco products, are taxed by multiple governments simultaneously. Some excise taxes are collected from the producer or retailer and not paid directly by the consumer, and as such often remain "hidden" in the price of a product or service, rather than being listed separately.

<span class="mw-page-title-main">Kretek</span> Type of Indonesian cigarette including cloves

Kretek are unfiltered cigarettes of Indonesian origin, made with a blend of tobacco, cloves, and other flavors. The word "kretek" itself is an onomatopoetic term for the crackling sound of burning cloves.

<span class="mw-page-title-main">China Tobacco</span> Chinese state-owned tobacco manufacturer and regulation agency

The State Tobacco Monopoly Administration or China National Tobacco Corporation is a Chinese government agency responsible for tobacco regulation and a state-owned manufacturer of tobacco products, operated by the Ministry of Industry and Information Technology of China. It enjoys a virtual monopoly in China, which accounts for roughly 40% of the world's total consumption of cigarettes, and is the world's largest manufacturer of tobacco products measured by revenues. It exports a small proportion of its production, mostly to Asian markets.

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PT Djarum is an Indonesian kretek brand/manufacturer founded on 21 April 1951 by Oei Wie Gwan in Kudus, Central Java. It produces dozens of domestic and international brands. Djarum Black, Super and L.A. Lights are among the most popular products of Djarum. The company owns the PB Djarum, a professional badminton club, the Italian football club Como 1907, and is the main sponsor of Liga 1, Indonesia's top football league from 2005 to 2011. Under its direct parent PT Dwimuria Investama Andalan, it has non-cigarette business lines in technology, banking and beverages.

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PT Bentoel Internasional Investama Tbk, commonly known as Bentoel Group, is an Indonesian tobacco company. It is the second-largest in the year of establishment and fourth-largest tobacco firm in Indonesia after Sampoerna, Gudang Garam and Djarum in terms of market share. In 2009, London-based British American Tobacco, the world's second-largest tobacco company, acquired a 99.74% stake in Bentoel. In early 2010, the company was merged with PT BAT Indonesia Tbk, with Bentoel continued to operate as the survived entity; however Bentoel had revive the BAT Indonesia name ever since.

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<span class="mw-page-title-main">Illicit cigarette trade</span> Trade in tobacco goods which fail to comply with legislation

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<span class="mw-page-title-main">Directorate General of Customs and Excise</span> Indonesian government customs agency

The Directorate General of Customs and Excise is an Indonesian government agency under Ministry of Finance that serves the community in the field of customs and excise. The Directorate General of Customs and Excise has the duty to organize the formulation and implementation of policies in the field of supervision, law enforcement, service and optimization of state revenue in the field of customs and excise in accordance with the provisions of legislation. The directorate also carry out some basic tasks of the Ministry of Finance in the field of customs and excise, in accordance with policies established by the Minister and securing government policies relating to the traffic of goods entering or leaving the Customs Area and the collection of import duties and excise and other state levies based on legislation apply.

<span class="mw-page-title-main">Cigarette excise in Indonesia</span> Type of tax in Indonesia

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<span class="mw-page-title-main">Excise in Indonesia</span>

Excise in Indonesia is a policy in Indonesia which mandates levies on certain goods that have certain characteristics, such as cigarettes, e-cigarettes, alcohol, and other tobacco and alcohol derivative products. In Indonesia, Directorate General of Customs and Excise, Ministry of Finance of the Republic of Indonesia is responsible for collecting excise.

References

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  4. 1 2 3 4 5 6 "Laporan Akhir Penyusunan Pemetaan Industri Hasil Tembakau Kabupaten Bandung". bapeda.bandungkab.go.id/. p. I-1-I-2. Retrieved 24 April 2014.
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  7. 1 2 3 "BAB 1 PENDAHULUAN" (PDF). digilib.its.ac.id/. Retrieved 24 April 2014.
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