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CIGARETTE AFFORDABILITY IN INDONESIA: 2002-2017
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... 5 While taxes have increased periodically, cigarette affordability only decreased by 10.2% from 2010 to 2017. 6 Furthermore, Indonesia's complex tax structure allows smaller manufacturers to be taxed at a relatively lower rate. For example, between 2010 and 2017, cigarette excise taxes for larger manufacturers increased between 35% and 46% in real terms, while taxes for smaller firms only increased by 15%-24%. ...
Background
A significant tobacco tax increase has long been advocated to reduce Indonesia’s high smoking prevalence. However, implementing such a policy remains challenging due to the tobacco industry’s argument that it would negatively impact the economy.
Objective
This study aims to provide a comprehensive estimate of the net impact of tobacco taxation on Indonesia’s economy.
Method
The impact of the tax hike on the economy is simulated through a change in cigarette demand and reallocation of household’s budget and allocation government spending from additional tobacco tax revenue. Input-output analysis is employed to estimate the net effect of the tobacco tax rise on the total economic output, income and employment in Indonesia.
Finding
Increasing the tobacco tax would generate a net positive impact on the economy as it would increase economic output, household income and employment. The positive impact is mainly driven by government spending from additional revenue from increased tobacco taxes. Spending tax revenue using the current structure of government spending has the potential to generate the optimal economic effect. Increasing tobacco tax by 45% from the 2019 tax level would increase economic output, household income and employment by Rp84.2 trillion, Rp24.1 trillion and 400.3 thousand jobs, respectively.
... Spending on cigarette consumption is only beaten by spending on rice and cellular phone pulses. [27] This incidental study shows the importance of community empowerment through understanding the economic impact on households, especially people who have family members who smoke. An empowerment exercise comparing the family's income and expenditure on smoking can have a sustainable effect in changing smoking behavior that can be explored further. ...
Background:
The household is considered as a private area that is untouched tobacco control policies in developing countries, especially in Indonesia, which has not ratified the Framework Convention on Tobacco Control (FCTC) treaty.
Objectives:
This study aims to identify smoking behavior and expenditure on cigarettes in the household, which are part of the initiation of a policy including a smoke-free home, so it assumes that the home is a public domain in Tegal Regency, Central Java Province, Indonesia.
Methods:
This research is an observational study with a quantitative descriptive design. A total of 225 subjects in the seven regions designated as smoke-free areas were all selected as samples in this study and were willing to be the subject of research.
Results:
The results found that 76.1% of smokers smoked with their nuclear family (wife/children/husband) present. Smoking behavior with the nuclear family inside the home (39.13%) and outside the home (36.96%) was more common than not smoking with the nuclear family. Expenditure for cigarettes per month was one-third of household revenue (IDR 607,521.74) based on the regency minimum wage (UMR) set by the local government.
Conclusions:
The study concludes that smokers who smoke with family still lack knowledge on smoking's impact on health and household economics. The smoke-free regulation that is initiated should include households as a parameter.
... 38 Turning to the association of changes in job status with switching to cheaper cigarettes, the downward substitution of cigarette consumption was made possible by the wide range of cigarette prices in Indonesia, which was attributed to the country's multitiered cigarette taxation. 39 For instance, although Indonesia's average cigarette price was US$2.00 per pack, people who smoke in the country could buy a pack of cigarettes for as cheap as USD$0.45, which provides an alternative for downtrading. ...
Introduction
There remains inconclusive evidence on potential changes in smoking status and behaviours during the COVID-9 pandemic, especially in developing countries. This study explores the direction of changes in smoking status and behaviours after ten months of the COVID-19 pandemic in Indonesia as well as examining the association between economic shocks and changes in smoking behaviours.
Methods
Primary data were gathered through a phone survey targeting productive-age mobile-phone users in Indonesia (n=1,082). Descriptive analysis was employed to determine changes in smoking status and behaviours ten month into the pandemic, while logistic regression analysis was used to investigate how employment shocks, financial strain, COVID-19 related indicators, and demographic characteristics were associated with smoking behaviours of people who continue smoking.
Results
Respondents experiencing changes in smoking status were dominated by people who persistently smoked during the pandemic, while those who quit, relapsed, and started smoking, was extremely small. Nevertheless, a considerable portion of people who continue smoking adjusted their smoking behaviours: 40.3% reduced smoking intensity and 25.3% switched to lower-price cigarettes. Multivariable regression analysis revealed that, among people who continue smoking, those who experienced financial strain during the pandemic had higher odds of reducing smoking intensity, while those who switched to lower job status had higher odds of switching to cheaper cigarettes.
Conclusions
The research has shown that smoking status and behaviours of people who continue smoking mostly remained unchanged after ten months of the COVID-19 pandemic. Changes in employment and financial conditions during the pandemic were associated with modified smoking behaviours.
Implications
This study is the first to determine the direction and analyse the factors of changes in smoking during the COVID-19 pandemic in Indonesia. This new understanding should help improve predicting the trends in smoking in future crises or pandemics in developing countries, specifically Indonesia. The discovered patterns on smokers’ reaction to an exogenous shock may provide evidence to support tobacco control policies in Indonesia.
... In 2018, the Ministry of Health approximated that, although rates were declining, 33.8% of all Indonesians were regular smokers, with 62.9% of adult males and 4.8% of adult females identified as smokers ( Figure 1). These rates of cigarette consumption are among the highest in the world (Zheng et al., 2018). Moreover, the health impacts of smoking are similar across all socio-economic groups (Liew & Hsu, 2009). ...
In Indonesia, the national universal health coverage scheme (Jaminan Kesehatan Nasional [JKN]) has consistently overspent against its budget since it was introduced in 2014. In 2017, a new regulation diverted 37.5% of tobacco tax revenue collected at the district and city level to the central government in order to increase government contributions to the JKN. Through a review of policy documents and interviews and focus group discussions with relevant stakeholders, this article explores the history of the JKN and its relationship to local tobacco taxes. Offering an ex-post assessment of the policy and its implementation, we find it negative on three fronts: funding for local anti-smoking initiatives and services was cut, the procedures for implementing the policy were complex and time-consuming, and it did not contribute as much as anticipated to the JKN. These findings underscore potential pitfalls of politically motivated policy that fails to consider implementation and impact. We recommend that the policy be revoked, and local tobacco tax revenue reallocated to its initial purpose, which includes promoting local smoking prevention programs and health service delivery.
... 10 c Ranking based on RIP calculated as the Global Adult Tobacco Survey-derived median price paid for 2,000 cigarettes, relative to per capita GDP in PPP-adjusted constant dollars, as reported inKostova et al (2014). The RIP forChina in 2006China in , 2008China in , 2009China in and 2016was sourced from the study of cigarette affordability in China conducted byZheng et al (2017).The RIP for Indonesia in 2006, 2009was sourced from the study of cigarette affordability in Indonesia conducted byZheng et al (2018). ...
Background
Health workers who should be role models for the community not to smoke and live a healthy life are still consuming cigarettes. Java and Bali (especially Java) are the biggest contributors to health worker deaths due to COVID-19 in Indonesia. This study aims to determine the association of smoking behavior and hypertension among health workers in Java and Bali. The researchers conducted this study in 2021 and designed it with a cross-sectional design. Data was collected online using the Lime Survey as a data collection tool. The data analysis used was logistic regression to determine the association of smoking and hypertension.
Result
A number of 7.6% of health workers were still smoking and 10.4% were suffering from hypertension during the COVID-19 pandemic. This study shows that the proportion of health workers with hypertension is two times that of smokers (18.0%) compared to non-smokers (9.8%). Logistic regression showed that smoking has a 20% higher risk of developing hypertension (OR = 1.97; 95%CI = 1.01–1.41; p = 0.034).
Conclusion
Among health workers on the islands of Java and Bali, there are still many who smoke, and this puts them at a higher risk of experiencing hypertension.
Background
The empirical evidence shows that tobacco consumption is strongly associated with its affordability. The nominal growth in tobacco prices imposed by taxation should exceed or at least keep pace with nominal income growth, ensuring that tobacco products become less affordable over time. No analysis covering affordability issues in the Southeastern European (SEE) region has been conducted prior to this research.
Objectives
The study aims to examine trends in cigarette affordability in ten selected SEE countries over the period 2008–2019 and the impact of affordability on the consumption of cigarettes. On the policy side, it aims to support conducting of more effective evidence-based policy of tobacco taxation.
Methods
The relative income price of cigarettes and the tobacco affordability index are used as affordability measures. The panel regression was run to estimate the impact of affordability measures and other covariates on cigarette consumption.
Results
The affordability of cigarettes in the selected SEE countries has decreased on average but showed different patterns over the observed period. A decline in affordability has been more dynamic in Western Balkan (non-EU members) countries and low-and-middle-income countries within the SEE region. Econometric estimation confirms affordability as the main determinant of tobacco consumption, indicating that a decline in affordability considerably reduces tobacco consumption.
Conclusions
Despite the evidence, affordability is still widely ignored by SEE policymakers when designing national tobacco taxation policies. Policymakers should be aware of the risk that future increases in cigarette prices could lag behind real income growth, making tax policy less effective at reducing consumption. Reducing affordability should be the paramount consideration in designing effective tobacco taxation policies.
INTRODUCTION
The objective of the review was to study the impact of tobacco taxes or
prices on affordability and/or consumption of tobacco products in WHO South-
East Asia Region (SEAR) countries, overall and by socioeconomic status; and
change in consumption of one tobacco product for a given change in price/tax
on another tobacco product.
METHODS
The searches were made in five databases (Medline, Embase, Cinahl,
EconLit, Tobacconomics) using keywords such as ‘tobacco’, ‘tax’, ‘price’, ‘impact’
with their synonyms. Additionally, the first 100 articles through google search
and e-reports from targeted sources were also reviewed. Studies illustrating the
impact of prices/taxes on consumption/affordability of tobacco products in SEAR,
in English and with no limitation on year, were included in the review. After two
steps of screening, data from 28 studies were extracted using a structured and
pre-tested data extraction form.
RESULTS
Of the 28 studies, 12 studies reported an inverse association between
price and consumption/affordability, while 11 studies reported no or positive
association between price and consumption/affordability of tobacco products.
Five studies had unclear interpretations. The majority of studies estimated that
the less affluent group were more price responsive compared to the more affluent
group. Some studies indicated increased consumption of one product in response
to price rise of another product, although, the findings were inconsistent.
CONCLUSIONS The findings of our review support the use of tobacco tax and price
measures as effective tools to address the tobacco epidemic. Our findings, however,
also emphasize the importance of increasing tobacco product taxes and prices
sufficiently to outweigh the effects of income growth, in order for the measures
to be effective in reducing the affordability and consumption of tobacco products.
Introduction:
The objective of the review was to study the impact of tobacco taxes or prices on affordability and/or consumption of tobacco products in WHO South-East Asia Region (SEAR) countries, overall and by socioeconomic status; and change in consumption of one tobacco product for a given change in price/tax on another tobacco product.
Methods:
The searches were made in five databases (Medline, Embase, Cinahl, EconLit, Tobacconomics) using keywords such as 'tobacco', 'tax', 'price', 'impact' with their synonyms. Additionally, the first 100 articles through google search and e-reports from targeted sources were also reviewed. Studies illustrating the impact of prices/taxes on consumption/affordability of tobacco products in SEAR, in English and with no limitation on year, were included in the review. After two steps of screening, data from 28 studies were extracted using a structured and pre-tested data extraction form.
Results:
Of the 28 studies, 12 studies reported an inverse association between price and consumption/affordability, while 11 studies reported no or positive association between price and consumption/affordability of tobacco products. Five studies had unclear interpretations. The majority of studies estimated that the less affluent group were more price responsive compared to the more affluent group. Some studies indicated increased consumption of one product in response to price rise of another product, although, the findings were inconsistent.
Conclusions:
The findings of our review support the use of tobacco tax and price measures as effective tools to address the tobacco epidemic. Our findings, however, also emphasize the importance of increasing tobacco product taxes and prices sufficiently to outweigh the effects of income growth, in order for the measures to be effective in reducing the affordability and consumption of tobacco products.
Objective:
To explore what is known about the tobacco industry's (TI) price-based responses to tobacco excise tax policies and whether these vary by country income group using a systematic review.
Data sources:
Studies assessing TI pricing tactics were identified via searches of five online databases using a combination of search keywords.
Study selection:
Inclusion criteria were applied by two reviewers independently who screened all search results (titles and abstracts) for possible inclusion. They identified 37 publications that reported TI pricing tactics.
Data extraction:
Study details were tabulated, and information was extracted on the country income group, population characteristics, excise tax structure, and pricing strategies.
Data synthesis:
Of the 37 publications identified, 22 were conducted in high-income countries, while 15 covered low-income and middle-income countries (LMICs). Major pricing strategies employed were: differentially shifting taxes between products (35 studies); launching new brands/products as pathways for downtrading (six studies), product promotions and different prices for the same products for different customers (six studies); price smoothing (two studies); and changing product attributes such as length/size of cigarettes or production processes (three studies).
Conclusions:
While there is limited evidence to fully ascertain industry responses to tax increases, this review suggests that the TI widely uses a multitude of sophisticated pricing strategies across different settings around the world with the intention of undermining tax policies, thereby increasing tobacco consumption and maximising their profits. There is a need for further research in this area especially in LMICs so that effective policy responses can be developed.
Aims
This review provides an up‐to‐date curated source of information on alcohol, tobacco, and illicit drug use and their associated mortality and burden of disease. Limitations in the data are also discussed, including how these can be addressed in the future.
Methods
Online data sources were identified through expert review. Data were mainly obtained from the World Health Organization, United Nations Office on Drugs and Crime, and Institute for Health Metrics and Evaluation.
Results
In 2015, the estimated prevalence among the adult population was 18.3% for heavy episodic alcohol use (in the past 30 days); 15.2% for daily tobacco smoking; and 3.8%, 0.77%, 0.37%, and 0.35% for past‐year cannabis, amphetamine, opioid, and cocaine use, respectively. European regions had the highest prevalence of heavy episodic alcohol use and daily tobacco use. The age‐standardised prevalence of alcohol dependence was 843.2 per 100,000 people; for cannabis, opioids, amphetamines and cocaine dependence it was 259.3, 220.4, 86.0 and 52.5 per 100,000 people, respectively. High‐Income North America region had among the highest rates of cannabis, opioid, and cocaine dependence. Attributable disability‐adjusted life‐years (DALYs) were highest for tobacco (170.9 million DALYs), followed by alcohol (85.0 million) and illicit drugs (27.8 million). Substance‐attributable mortality rates were highest for tobacco (110.7 deaths per 100,000 people), followed by alcohol and illicit drugs (33.0, and 6.9 deaths per 100,000 people, respectively). Attributable age‐standardised mortality rates and DALYs for alcohol and illicit drugs were highest in Eastern Europe; attributable age‐standardised tobacco mortality rates and DALYs were highest in Oceania.
Conclusions
In 2015 alcohol and tobacco use between them cost the human population more than a quarter of a billion disability‐adjusted life years, with illicit drugs costing a further tens of millions. Europeans proportionately suffered more but in absolute terms the mortality rate was greatest in low and middle income countries with large populations and where the quality of data was more limited. Better standardised and rigorous methods for data collection, collation and reporting are needed to assess more accurately the geographical and temporal trends in substance use and its disease burden.
There is a policy measure that can simultaneously save millions of lives, reduce poverty, and increase countries’ domestic resources for financing development. The policy measure consists of increasing excise tax rates on tobacco in order to reduce its affordability and, as evidence shows, lower its consumption. Today, this powerful human development and poverty reduction measure remains largely underutilized, especially in low- and middle-income countries (LMICs). This report provides decision support for policy makers on tobacco tax reform, as well as analytical and empirical tools for using tobacco excise taxes to save lives and increase government revenues. The report sets forth the public health, economic, and anti-poverty case for higher tobacco taxes; shows how some countries have already delivered ambitious reforms; and documents measurable results. It shows that, by implementing tobacco tax reforms now, policy makers can choose a fast road to healthier, more prosperous societies.
Background:
The detrimental impact of smoking on health has been widely documented since the 1960s. Numerous studies have also quantified the economic cost that smoking imposes on society. However, these studies have mostly been in high income countries, with limited documentation from developing countries. The aim of this paper is to measure the economic cost of smoking-attributable diseases in countries throughout the world, including in low- and middle-income settings.
Methods:
The Cost of Illness approach is used to estimate the economic cost of smoking attributable-diseases in 2012. Under this approach, economic costs are defined as either 'direct costs' such as hospital fees or 'indirect costs' representing the productivity loss from morbidity and mortality. The same method was applied to 152 countries, which had all the necessary data, representing 97% of the world's smokers.
Findings:
The amount of healthcare expenditure due to smoking-attributable diseases totalled purchasing power parity (PPP) $467 billion (US$422 billion) in 2012, or 5.7% of global health expenditure. The total economic cost of smoking (from health expenditures and productivity losses together) totalled PPP $1852 billion (US$1436 billion) in 2012, equivalent in magnitude to 1.8% of the world's annual gross domestic product (GDP). Almost 40% of this cost occurred in developing countries, highlighting the substantial burden these countries suffer.
Conclusions:
Smoking imposes a heavy economic burden throughout the world, particularly in Europe and North America, where the tobacco epidemic is most advanced. These findings highlight the urgent need for countries to implement stronger tobacco control measures to address these costs.
Objectives:
To examine how transnational tobacco companies (TTCs) tried to penetrate the Bulgarian cigarette market and influence tobacco excise tax policy after the fall of communism and during Bulgaria's accession to the European Union (EU).
Design:
Analysis of internal tobacco industry documents supplemented by analysis of press coverage, tobacco industry journals, market reports and key informant interviews.
Results:
TTCs have been involved in cigarette smuggling to and through Bulgaria since at least 1975 and used smuggling as a market-entry strategy. National tobacco company Bulgartabac appears to have been involved in smuggling its own cigarettes from and reimporting them to Bulgaria. Since Bulgaria's accession to the EU opened the market to the TTCs, TTCs have exaggerated the scale of the illicit trade to successfully convince politicians and public health experts that tax increases lead to cigarette smuggling. Yet, sources point to TTCs' continued complicity in cigarette smuggling to and through Bulgaria between 2000 and 2010. TTCs aimed to influence the Bulgarian tobacco excise tax regime, import duties and pricing mechanism, but appear to have been less successful than in other former communist countries in part due to the co-existence of a state-owned tobacco company. Undisclosed meetings between the tobacco industry and government ministers and officials are ongoing despite Bulgaria being a party to the Framework Convention on Tobacco Control (FCTC).
Conclusions:
The TTCs continued involvement in smuggling suggests that deals in 2004, 2007 and 2010 which the European Commission has reached with TTCs to address cigarette smuggling are inadequate. The TTCs' continued access to policymakers suggests that the FCTC is not being properly implemented.
This study estimates the impact of excise tariff simplification on cigarette consumption and government revenue. In addition, the study compares the 'simplification' case with the 'no simplification' case. Several estimation models using unbalanced and sub-balanced panel data, random effect maximum likelihood estimation (MLE) and panel-corrected standard errors (PCSE) are explored to estimate the impact. The results indicate that tariff simplification has a greater impact on raising cigarette prices, reducing consumption, and increasing government revenue than regularly increased excise rates. The greatest impact can be seen in cigarettes produced by large companies and white cigarette machine-made product. The results also suggest that cigarette excise taxes are 'under-shifted' to consumers and that producers bear some of the tax burden.
Background: Fifty years after the first Surgeon General’s report, tobacco use remains the nation’s leading preventable cause of death and disease, despite declines in adult cigarette smoking prevalence. Smoking-attributable healthcare spending is an important part of overall smoking attributable costs in the U.S.
Purpose: To update annual smoking-attributable healthcare spending in the U.S. and provide smoking-attributable healthcare spending estimates by payer (e.g., Medicare, Medicaid, private insurance) or type of medical services.
Methods: Analyses used data from the 2006–2010 Medical Expenditure Panel Survey linked to the 2004–2009 National Health Interview Survey. Estimates from two-part models were combined to predict the share of annual healthcare spending that could be attributable to cigarette smoking. The analysis was conducted in 2013.
Results: By 2010, 8.7% (95% CI¼6.8%, 11.2%) of annual healthcare spending in the U.S. could be attributed to cigarette smoking, amounting to as much as $170 billion per year. More than 60% of the attributable spending was paid by public programs, including Medicare, other federally sponsored programs, or Medicaid.
Conclusions: These findings indicate that comprehensive tobacco control programs and policies are still needed to continue progress toward ending the tobacco epidemic in the U.S. 50 years after the release of the first Surgeon General’s report on smoking and health.
Bartolome R. Celli, Marc Decramer, Jadwiga A. Wedzicha, Kevin C. Wilson, Alvar Agustí, Gerard J. Criner, William MacNee, Barry J. Make, Stephen I. Rennard, Robert A. Stockley, Claus Vogelmeier, Antonio Anzueto, David H. Au, Peter J. Barnes, Pierre-Regis Burgel, Peter M. Calverley, Ciro Casanova, Enrico M. Clini, Christopher B. Cooper, Harvey O. Coxson, Daniel J. Dusser, Leonardo M. Fabbri, Bonnie Fahy, Gary T. Ferguson, Andrew Fisher, Monica J. Fletcher, Maurice Hayot, John R. Hurst, Paul W. Jones, Donald A. Mahler, François Maltais, David M. Mannino, Fernando J. Martinez, Marc Miravitlles, Paula M. Meek, Alberto Papi, Klaus F. Rabe, Nicolas Roche, Frank C. Sciurba, Sanjay Sethi, Nikos Siafakas, Don D. Sin, Joan B. Soriano, James K. Stoller, Donald P. Tashkin, Thierry Troosters, Geert M. Verleden, Johny Verschakelen, Jorgen Vestbo, John W. Walsh, George R. Washko, Robert A. Wise, Emiel F. M. Wouters, Richard L. ZuWallack. (2015) An Official American Thoracic Society/European Respiratory Society Statement: Research Questions in Chronic Obstructive Pulmonary Disease. American Journal of Respiratory and Critical Care Medicine 191, e4-e27
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