Indonesian Tobacco Industry Stability Maintained Amid No CHT Increase

Economic Significance of Tobacco Sector

The Indonesian government has decided to maintain the current Tobacco Excise Tariff (CHT), a move that DPR RI Commission XI Chairman Mukhamad Misbakhun believes will better protect tobacco farmers. The tobacco industry is crucial to Indonesia's economy as it absorbs millions of workers and generates significant export revenue. Misbakhun highlighted that tobacco farmers have long been neglected, receiving minimal state support such as fertilizer or pesticide subsidies.

Challenges Faced by Tobacco Farmers

Misbakhun pointed out that many tobacco farmers still rely on traditional practices passed down through generations due to lack of government support. He stressed the need for better guidance on safe agricultural practices and pesticide use to improve crop quality and quantity. The quality of tobacco products directly impacts the industry's export capabilities and foreign exchange earnings for Indonesia.

Economic Contribution of Tobacco Industry

The tobacco industry is a strategic source of state revenue, contributing over Rp200 trillion annually through excise taxes. Misbakhun emphasized that any policy decisions regarding the CHT must consider both the short-term and long-term impacts on the industry and its workforce. He advocated for comprehensive solutions rather than temporary fixes to maintain the sector's stability and continued contribution to national economic health.

Future Policy Directions

Misbakhun called for balanced policy-making that considers both the upstream and downstream aspects of the tobacco industry. He stressed that maintaining the current CHT is a step towards achieving this balance, ensuring continued employment and economic benefits while addressing the fundamental challenges faced by tobacco farmers. The decision reflects a broader understanding of the industry's role in Indonesia's economic landscape.