Impacts of Increasing Tobacco Tax on Workers in Indonesia

Regulations by 2FIRSTS.ai
May.29.2024
Impacts of Increasing Tobacco Tax on Workers in Indonesia
Indian union leader Purnomo warns increasing tobacco taxes threaten cigarette industry survival, affecting workers, urges government to reconsider tax increase.

According to Antara's report on May 28, Indian union leader Purnomo has warned that the annually increasing tobacco tax is threatening the survival of the cigarette industry and affecting workers. Over the past five years, this tax has accumulated to 67.5%. The high taxes have led to soaring cigarette prices, resulting in the widespread proliferation of illegal cigarettes in society.

 

Purnomo warned that legal cigarette companies could disappear due to being unable to compete with illegal cigarettes. Therefore, the government must consider the industry's capacity to bear the burden when raising tobacco taxes. Reiterating this point, Purnomo called on the government to stop raising tobacco taxes by 2025. He hopes that doing so will continue to increase job opportunities.

 

Union leaders have indicated that if the tobacco industry is doing well, the number of workers may increase. For example, in the Indonesian hand-rolled cigarette industry (SKT), a tobacco tax policy supported the hiring of workers. Additionally, in his organization RTMM, two companies have increased their staff, employing around 5000 workers. This has played a significant role in reducing unemployment in Indonesia, especially in heavily populated areas like East Java.

 

On the other hand, Mike Verawati Tangka, Secretary General of the Indonesian Women's Alliance, pointed out that about 90% of workers in the cigarette industry are women. However, she has yet to see the government play a significant role in addressing and protecting the rights of female workers in the industry. Her concern is based on the heavy dependence of the cigarette industry on government policies. The annual increase in tobacco taxes may directly impact production maintenance, but also threaten the livelihood of workers. Therefore, she hopes that raising tobacco taxes should not only be considered from a financial and inflation perspective, but also from the perspective of its impact on workers.

 

Mik also hopes that the government will consider workers and other areas that will be affected by the tobacco tax policy when implementing it. She is concerned that raising tobacco taxes could not only lead to financial difficulties but also result in companies laying off a large number of employees. She hopes that the tobacco tax policy will take into account tobacco farmers, as they may also have female workers in the tobacco fields.

 

In addition, Mick believes that increasing tobacco taxes could also have a wider negative impact on the cigarette industry and surrounding environment, such as large-scale layoffs of employees. She emphasizes that if tobacco taxes are increased, the impact on employee welfare must be considered. This policy not only affects workers' welfare and livelihood stability, but may also have an impact on their families and surrounding communities.

 

In conclusion, Mike emphasized that the government must consider the fate of workers when formulating policies, rather than just focusing on macroeconomic interests or solely on economic growth. "The country must also recognize that good economic growth is built on the foundation of employee welfare.

 

We welcome news tips, article submissions, interview requests, or comments on this piece.

Please contact us at info@2firsts.com, or reach out to Alan Zhao, CEO of 2Firsts, on LinkedIn


Notice

1.  This article is intended solely for professional research purposes related to industry, technology, and policy. Any references to brands or products are made purely for objective description and do not constitute any form of endorsement, recommendation, or promotion by 2Firsts.

2.  The use of nicotine-containing products — including, but not limited to, cigarettes, e-cigarettes, nicotine pouchand heated tobacco products — carries significant health risks. Users are responsible for complying with all applicable laws and regulations in their respective jurisdictions.

3.  This article is not intended to serve as the basis for any investment decisions or financial advice. 2Firsts assumes no direct or indirect liability for any inaccuracies or errors in the content.

4.  Access to this article is strictly prohibited for individuals below the legal age in their jurisdiction.

 

Copyright

 

This article is either an original work created by 2Firsts or a reproduction from third-party sources with proper attribution. All copyrights and usage rights belong to 2Firsts or the original content provider. Unauthorized reproduction, distribution, or any other form of unauthorized use by any individual or organization is strictly prohibited. Violators will be held legally accountable.

For copyright-related inquiries, please contact: info@2firsts.com

 

AI Assistance Disclaimer

 

This article may have been enhanced using AI tools to improve translation and editorial efficiency. However, due to technical limitations, inaccuracies may occur. Readers are encouraged to refer to the cited sources for the most accurate information.

We welcome any corrections or feedback. Please contact us at: info@2firsts.com

French Vape Market Under Pressure as Europe’s First Listed Vape Company Kumulus Vape Reports 7.8% H1 Revenue Decline, Retail Sales Rise 41.5%
French Vape Market Under Pressure as Europe’s First Listed Vape Company Kumulus Vape Reports 7.8% H1 Revenue Decline, Retail Sales Rise 41.5%
Kumulus Vape, Europe’s first publicly listed vape company, reported a 7.8% year-on-year decline in first-half 2026 revenue. Amid changing conditions in France’s vape market, the company said channel diversification helped offset pressure, with physical store sales increasing 41.5% year on year. Listed on Euronext Access Paris in 2019 and later transferred to Euronext Growth Paris, Kumulus Vape is viewed as a representative company of Europe’s vape sector. Its performance highlights the industry’s shift from rapid expansion toward more operationally focused growth.
Jul.27
JTI Makes Third Bet on South Korea as Ploom AURA Enters a Market Dominated by lil and IQOS
JTI Makes Third Bet on South Korea as Ploom AURA Enters a Market Dominated by lil and IQOS
Japan Tobacco International is stepping up its heated tobacco push in South Korea with Ploom AURA. Since its official launch in April 2026, the device's limited First Edition and Glacier White version have sold out, while distribution has expanded across Seoul, Incheon, Gyeonggi Province and airport duty-free channels. The rollout marks JTI's third major attempt to build a stronger heated tobacco position in South Korea, following Ploom TECH in 2019 and Ploom X Advanced in 2024. At the group level, JT plans to invest about ¥800 billion, approximately $5 billion, in reduced-risk products from 2026 through 2028, with heated products and Ploom identified as its primary investment priority.
Aug.14
BAT’s Velo Study Finds 61% of Nicotine Users Feel More Comfortable Expressing Themselves When Others Do the Same
BAT’s Velo Study Finds 61% of Nicotine Users Feel More Comfortable Expressing Themselves When Others Do the Same
British American Tobacco’s (BAT) nicotine pouch brand Velo has released a global consumer study and launched its “Echoes of Tomorrowland” campaign with electronic music festival brand Tomorrowland. The research surveyed 2,009 nicotine users across the UK, Spain, Pakistan, Poland and Austria. Velo said 61% of respondents feel more comfortable expressing themselves when they see others doing the same, while 39% said building meaningful connections becomes harder with age. The campaign reflects how nicotine pouch brands are increasingly using music, communities and lifestyle marketing to build consumer engagement.
Aug.10
Philip Morris Romania Expands IQOS Boutique Network to 120 Locations With Retail 2.0 Store
Philip Morris Romania Expands IQOS Boutique Network to 120 Locations With Retail 2.0 Store
Philip Morris Romania has opened IQOS Boutique Victoriei in Bucharest, expanding the country’s IQOS retail network to 120 points of sale and advancing a Retail 2.0 concept that combines design, technology, interactive art and urban culture.
PMI
Jul.13
Japan’s Heated Tobacco Tax Changes Reshape Consumer Choices, Survey Reveals Impact of Price and Income
Japan’s Heated Tobacco Tax Changes Reshape Consumer Choices, Survey Reveals Impact of Price and Income
A consumer survey by Japanese heated tobacco information platform RELAZO found that rising tobacco prices and planned heated tobacco tax changes may influence smoking decisions among Japanese consumers. The survey covered 49,879 men and women aged 20 to 69 nationwide. It found that around 40% of respondents cumulatively indicated they may consider quitting when a pack reaches ¥600 (approximately US$4.1), while nearly 90% expressed potential quitting intentions at a ¥1,000 (approximately US$6.8) price level. The survey also found significant differences by income level, with lower-income respondents showing greater sensitivity to price increases.
Jul.24
Shopify Requires Merchants to Remove All Vape Products by July 8, Reshaping Online Sales Channels
Shopify Requires Merchants to Remove All Vape Products by July 8, Reshaping Online Sales Channels
Shopify has instructed merchants using its web-hosting services to remove vape products from their online stores by July 8, 2026. The policy expands beyond illegal products and applies to all electronic nicotine delivery systems (ENDS), marking a broader shift in online platform oversight of nicotine sales.
Innovation
Jul.14 by 2Firsts Perspectives