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| The East Java Chamber of Commerce and Industry (Kadin), in collaboration with UMM, has completed a policy recommendation study on the increase in tobacco excise (CHT) for the optimization of the Tobacco Excise Revenue Sharing Fund (DBHCHT). (Photo : Special) |
The East Java Chamber of Commerce and Industry (Kadin), together with Muhammadiyah University of Malang (UMM), completed a policy recommendation study on the increase in tobacco excise tax (CHT) to optimize the Tobacco Excise Revenue Sharing Fund (DBHCHT). The study's findings emphasize the importance of determining CHT policy by considering a balance of various aspects. The study was conducted in early January 2025.
A series of considerations underlie the results of the study, including the contribution of the tobacco products industry (IHT) to the national and regional economies, labor, illegal cigarettes, and public health. With these considerations in mind, it is hoped that a balanced policy will be achieved, leading to a positive impact on regional development through the allocation of DBHCHT.
Kadin East Java Chairman Adik Dwi Putranto stated that the IHT is one of the important industries with a significant contribution, not only at the national level but also in regions such as East Java. "Development in East Java cannot be separated from IHT. Its contribution reaches 33% of the Gross Regional Domestic Product (GRDP). On the other hand, East Java is also a major contributor to CHT revenue nationally, with a contribution of up to 60%," he said.
Adik added that East Java is one of the centers of tobacco products in Indonesia. In addition to its contribution to national excise revenue, industry players in East Java employ 40% of the direct labor in the IHT sector nationwide. Given this close relationship, he expressed special appreciation to the government, particularly the Directorate General of Customs and Excise, Ministry of Finance, for stipulating no increase in CHT tariffs for 2025.
“We believe that this policy will encourage the optimization of DBHCHT, which can support the development of East Java. However, considering that the IHT is currently facing various pressures, we believe that future policies require in-depth studies to ensure the sustainability of the industry,” he said.
Meanwhile, the Dean of the Faculty of Economics and Business at UMM, Prof. Dr. Idah Zuhroh, M.M., also emphasized the importance of DBHCHT for East Java. According to her, East Java has consistently been the province with the largest DBHCHT allocation nationally.
“However, the DBHCHT received by East Java in 2024 has decreased drastically, by around 10%. We believe this is in line with the decline in CHT revenue nationally in 2023, due to consecutive high tariff increases,” Idah said.
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Based on this conclusion, she believes that DBHCHT optimization can be achieved with an appropriate and balanced CHT tariff increase policy to stimulate national CHT revenue growth and DBHCHT allocation to the regions. Idah views the decision to not increase CHT tariffs for 2025 as the right step in the short term. The policy of tariff increases in 2026 and beyond also needs to be based on a balanced study to sustain the momentum of recovery and growth in CHT and DBHCHT revenues.
"As for the long term, of course, a more in-depth study is needed. Muhammadiyah University of Malang, as an academic institution, is ready to provide support both to the government and to the East Java Kadin in order to achieve a balanced policy for the IHT in the future," continued Idah. (*/wil/mrh)
