Indonesia Conference Directory

As the most profitable industries in the world, tobacco industries is suspected, do not make a fair tax contribution. Cigarettes are a reliable source of tax revenue for governments worldwide, and tobacco is one of the world-s most regulated and most taxed industries. However, the mentioned claims relate to excise taxes rather than corporate income tax. In term of excise, the tobacco companies lobbying intensively against significant increases in duty rates. Whereas, the economic damage suffered by Indonesia caused by cigarette consumption was four times higher than the excise revenue. Since taxation is one of six tobacco control policies introduced by WHO, so this study aims to evaluate the effectivity of tax policy in Indonesia in reducing consumption of cigarettes to support the achievement of SDG. This study is conducted by a quantitative approach using statistical data analysis. As a result, tax policy in Indonesia has low effectiveness in reducing cigarette consumption, so that it can endanger the efforts to achieve the SDGs. There must be a reconstruction of tax policy, related to all types of taxes so that taxes can be a political instrument to overcome the negative externalities of cigarette consumption and overcome the problem of high economic costs. This study is critical because the issue of human and economic damage due to cigarette consumption does not only occur in Indonesia but also in lower income countries.