Tobacco Products Industry Absorbs 5.98 Million Workers
"IHT is a part of the history of the nation and culture of Indonesia, especially clove cigarettes. The reason is that tobacco and clove-based products are inherited from ancestral innovations and have been rooted for generations," said Industry Minister Airlangga Hartarto as written, Friday (3/22) / 2019).
Airlangga explained, the domestic cigarette industry has increased the added value of local raw materials in the form of plantation products such as tobacco and cloves. In addition, it is considered as a labor-intensive and export-oriented sector so that it can sustain economic growth.
The Ministry of Industry noted that the total workforce absorbed by the cigarette industry sector amounted to 5.98 million people.
The total workforce consists of 4.28 million workers in the manufacturing and distribution sectors, and the remaining 1.7 million work in the plantation sector.
In 2018, the export value of cigarettes and cigars reached USD 931.6 million, an increase of 2.98 percent compared to 2017 amounting to USD 904.7 million. "The cigarette industry can also be regarded as a local wisdom sector that has global competitiveness," he said.
IHT is also a significant contributor to state revenue through excise. Throughout 2018, cigarette excise revenue has reached up to Rp 153 trillion or higher than the acquisition in 2017 of Rp 147 trillion. Cigarette tax receipts last year contributed 95.8 percent of the national excise tax.
However, IHT products are exciseable goods to control their consumption.
As a consequence, regulations related to smoking are increasingly stringent both at home and abroad because the consideration of consumer protection and health is a challenge for the tobacco industry.
"Of course, through this industry, we do not recommend that many people consume cigarettes, but we invite that young people are kept away from cigarettes, especially school children. In addition, Kemi encourages health care through industrial R&D," said Airlangga.
Some regulations related to the cigarette industry, including Government Regulation Number 109 of 2012 concerning Safeguarding Materials Containing Addictive Substances in the Form of Tobacco Products for Health.
In addition, there is RI Presidential Regulation No. 44 of 2016 concerning the List of Open Business Sectors and Open Business Sectors with Requirements in the Field of Investment. This regulation is followed up with Regulation of the Minister of Industry No.64 of 2014 concerning Supervision and Control of the Cigarette Industry Business.
"These regulations are policies that become a middle way in ensuring the certainty of IHT business while maintaining aspects of employment and ensuring aspects of public health," he said.