The Impact of Single Tariff Policy on Small and Medium Industries

Oct 13, 2025 by talynt.org 13 views

Introduction

The tobacco product industry is a significant sector in the Indonesian economy, contributing to state revenue through excise, employment, and regional income. As one of the world's largest tobacco producers, Indonesia supplies around 2.1% of the total world tobacco supply. The industry's importance is reflected in the government's efforts to create a strong and competitive tobacco industry, both domestically and internationally, while also addressing public health concerns. This article provides a comprehensive analysis of the excise tariff policy on the tobacco product industry in North Sumatra, highlighting the challenges faced by small and medium industries and the need for a more balanced approach.

Background

The tobacco industry has been subject to global pressure to ratify the tobacco control framework convention, aiming to reduce the negative impact of cigarettes on public health. In response, the Indonesian government launched the 2007-2020 tobacco product industry roadmap, which aims to create a strong and competitive tobacco industry while addressing public health concerns. Additionally, Minister of Finance Regulation No. 181/PMK.011/2009 concerning Tobacco Excise Tariffs aims to increase state revenue through a single tariff policy.

The Impact of Single Tariff Policy on Small and Medium Industries

The single tariff policy has resulted in challenges for small and medium industries in North Sumatra. With this policy, all tobacco industry players are forced to follow the same tariff, which can have an unfair impact on small-scale industries that are vulnerable to price changes. Price fluctuations can force consumers to switch to substitution products, thus threatening the sustainability of the small and medium industries. This is particularly concerning in North Sumatra, where small and medium industries play a crucial role in the regional economy.

The Need for a Deeper Study

The results of the study highlight the need for a deeper analysis of the application of a single tariff policy and its impact on state income and the tobacco industry. There is an urgent need to balance the government's goals in increasing state income with the interests of the community, local industry, and local governments. The local government's efforts to increase the business climate are very important, and this can be done by reducing transaction costs caused by local regulations, as well as increasing investment in infrastructure.

The Role of Local Government

The local government plays a crucial role in promoting a favorable business climate in North Sumatra. Reducing transaction costs caused by local regulations and increasing investment in infrastructure can help to attract more businesses and create jobs. Additionally, the local government needs to evaluate the allocation of Tobacco Excise Funds for Tobacco, ensuring that the funds received can have a positive impact on the community and the environment around the tobacco industry.

The Importance of Fair Allocation of Tobacco Excise Funds

The allocation of Tobacco Excise Funds for Tobacco is a critical issue that needs to be addressed. The funds generated from excise should be used to benefit the community and the environment around the tobacco industry. A more fair and profitable allocation of funds can be achieved through a more holistic approach, taking into account the interests of all parties involved in the industry.

Conclusion

The excise tariff policy on the tobacco product industry in North Sumatra is a complex issue that requires a balanced approach. The government's goals in increasing state income must be balanced with the interests of the community, local industry, and local governments. The local government's efforts to increase the business climate and evaluate the allocation of Tobacco Excise Funds for Tobacco are crucial in promoting a favorable business climate and ensuring that the funds generated from excise can have a positive impact on the community and the environment around the tobacco industry.

Recommendations

Based on the findings of this study, the following recommendations are made:

Conduct a deeper study: A more in-depth analysis of the application of a single tariff policy and its impact on state income and the tobacco industry is necessary to inform policy decisions.
Balance government goals with community interests: The government's goals in increasing state income must be balanced with the interests of the community, local industry, and local governments.
Promote a favorable business climate: The local government should reduce transaction costs caused by local regulations and increase investment in infrastructure to attract more businesses and create jobs.
Evaluate the allocation of Tobacco Excise Funds for Tobacco: The local government should evaluate the allocation of Tobacco Excise Funds for Tobacco to ensure that the funds received can have a positive impact on the community and the environment around the tobacco industry.

By implementing these recommendations, the excise tariff policy on the tobacco product industry in North Sumatra can be made more effective and beneficial for all parties involved in the industry.

Q1: What is the significance of the tobacco product industry in the Indonesian economy?

A1: The tobacco product industry is a significant sector in the Indonesian economy, contributing to state revenue through excise, employment, and regional income. As one of the world's largest tobacco producers, Indonesia supplies around 2.1% of the total world tobacco supply.

Q2: What is the purpose of the 2007-2020 tobacco product industry roadmap?

A2: The 2007-2020 tobacco product industry roadmap aims to create a strong and competitive tobacco industry both domestically and internationally, while also addressing public health concerns.

Q3: What is the impact of the single tariff policy on small and medium industries in North Sumatra?

A3: The single tariff policy has resulted in challenges for small and medium industries in North Sumatra. With this policy, all tobacco industry players are forced to follow the same tariff, which can have an unfair impact on small-scale industries that are vulnerable to price changes.

Q4: What is the role of the local government in promoting a favorable business climate in North Sumatra?

A4: The local government plays a crucial role in promoting a favorable business climate in North Sumatra. Reducing transaction costs caused by local regulations and increasing investment in infrastructure can help to attract more businesses and create jobs.

Q5: Why is it essential to evaluate the allocation of Tobacco Excise Funds for Tobacco?

A5: The allocation of Tobacco Excise Funds for Tobacco is a critical issue that needs to be addressed. The funds generated from excise should be used to benefit the community and the environment around the tobacco industry. A more fair and profitable allocation of funds can be achieved through a more holistic approach, taking into account the interests of all parties involved in the industry.

Q6: What are the recommendations for improving the excise tariff policy on the tobacco product industry in North Sumatra?

A6: Based on the findings of this study, the following recommendations are made:

Conduct a deeper study: A more in-depth analysis of the application of a single tariff policy and its impact on state income and the tobacco industry is necessary to inform policy decisions.
Balance government goals with community interests: The government's goals in increasing state income must be balanced with the interests of the community, local industry, and local governments.
Promote a favorable business climate: The local government should reduce transaction costs caused by local regulations and increase investment in infrastructure to attract more businesses and create jobs.
Evaluate the allocation of Tobacco Excise Funds for Tobacco: The local government should evaluate the allocation of Tobacco Excise Funds for Tobacco to ensure that the funds received can have a positive impact on the community and the environment around the tobacco industry.

Q7: What are the benefits of a more holistic approach to the excise tariff policy on the tobacco product industry in North Sumatra?

A7: A more holistic approach to the excise tariff policy on the tobacco product industry in North Sumatra can provide greater benefits for all parties involved in the industry. This includes a more fair and profitable allocation of Tobacco Excise Funds for Tobacco, as well as a more favorable business climate that can attract more businesses and create jobs.

Q8: How can the local government ensure that the funds generated from excise are used to benefit the community and the environment around the tobacco industry?

A8: The local government can ensure that the funds generated from excise are used to benefit the community and the environment around the tobacco industry by evaluating the allocation of Tobacco Excise Funds for Tobacco and making adjustments as necessary. This can include investing in infrastructure, reducing transaction costs, and promoting a favorable business climate.

Q9: What are the implications of the study's findings for policymakers and stakeholders in North Sumatra?

A9: The study's findings have significant implications for policymakers and stakeholders in North Sumatra. Policymakers must balance the government's goals in increasing state income with the interests of the community, local industry, and local governments. Stakeholders, including small and medium industries, must also be aware of the challenges posed by the single tariff policy and work with policymakers to find solutions.

Q10: What are the next steps for implementing the study's recommendations?

A10: The next steps for implementing the study's recommendations include conducting a deeper study of the application of a single tariff policy and its impact on state income and the tobacco industry. Policymakers and stakeholders must also work together to promote a favorable business climate, evaluate the allocation of Tobacco Excise Funds for Tobacco, and make adjustments as necessary to ensure that the funds generated from excise are used to benefit the community and the environment around the tobacco industry.