FEB UI RESEARCH: INCREASING CIGARETTE EXCISE TAX IS ONE OF THE SOLUTIONS TO PREVENT STUNTING
In early 2023, the Indonesian government has officially set a 10 to 15 percent increase in cigarette excise tax. This is stated in the Regulation of the Minister of Finance Number 191 of 2022 on Excise Tariffs on Tobacco Products in the form of Cigarettes, Cigars, Leaf Cigarettes or Klobot and Iris Tobacco. This increase provoked responses from various levels of society, both agreeing and disagreeing with this regulation.
One of the responses that recently went viral on social media Twitter is the response from the @bfndrk account which agrees to an increase in cigarette excise tax. His tweet, which included screenshots of research from the Faculty of Economics and Business, Universitas Indonesia (FEB UI), received 20,000 likes and 6,900 retweets. The study revealed that smoking can cause stunting (a condition of failure to thrive due to malnutrition), so increasing the excise tax for that is one of the solutions to prevent stunting.
As the lead researcher in the research, Teguh Dartanto, Ph.D., who is also the Dean of FEB UI, said he was proud because his research was not only accommodated by the viral account on Twitter but also adopted as a policy in the form of increasing cigarette excise tax. “As a researcher, it is an honor to have my research made into a policy and be accommodated by the community. We at FEB UI are indeed the first economists to explore issues like this (the relationship between smoking and stunting). So far, smoking has only been (connected) with health issues,” said Teguh in the SEVIMA Community Webinar, last January.
Teguh further explained, the relationship between smoking and stunting stems from how smokers spend money on their families. The head of a family who smokes prioritizes his money to spend on cigarettes over his family’s welfare. Even when getting social assistance from the government, he uses it for buying cigarettes.
“We conducted this research by following more than 7,000 data on parents and children for decades obtained from the Indonesia Family Life Survey in 2018, coupled with direct research we conducted in Demak, Central Java. From there, we found that parents who smoke tend to have stunted children,” said Teguh.
What is even more concerning, Teguh said, is not only government assistance and their own money that smokers “burn” but also the potential to burn the future of their children even before they are born. In addition to nutritional problems caused by smokers prioritizing buying cigarettes over food for the family, smokers also expose pregnant women to passive smoking.
“Even when the children grow up, instead of sending their children to school, their money is used to buy cigarettes. When I went straight to do research in Demak, I was deeply concerned to see the condition of children who are stunted simply because of an irrational parent’s decision to think of themselves more than their child. How could there be such irrational people? Because cigarettes contain addictive substances,” said Teguh for his research with the FEB UI team which has also been published in various leading international journals.
Teguh hopes that the public can understand the philosophy of why cigarette excise tax needs to be increased. This is because when the price of cigarettes is getting more expensive, the more people do not want to buy cigarettes. In addition, he also advised the public to prioritize nutrition and children’s education. In particular, for recipients of assistance from the government (Program Keluarga Harapan/PKH), all recipients have signed a clause that social assistance may not be used for smoking. He hopes that the resources provided by the government for the underprivileged would not be used to buy cigarettes.
“Instead of burning money for buying expensive cigarettes, it’s better to just stop smoking. That’s the main goal of increasing excise tax for that. Our research also shows that there are still smokers who are rational, meaning that when cigarettes are expensive, some stop and some reduce their smoking habit. Hence, the final goal will eventually be achieved, which is excise tax will reduce stunting,” said Teguh.
