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21 April 2010

Indonesia’s lower house against cigarette production cut

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Indonesia’s House of Representatives’ Commission XI on finance has opposed the government’s plan to lower cigarette production to 248.4 billion sticks from 261 billion this year, reported the Jakarta Post.

Golkar Party lawmaker Nusron Wahid said on the sidelines of a budget revision hearing on Tuesday the production cut would cause the state to lose 10 trillion rupiah in potential revenue. (1$=9,000 rupiah)

“The production should stand at 261 billion as originally planned,” Nusron said.

He suggested that the government stop drafting a regulation on control of tobacco impacts, which would require the government to lower national cigarette production.

Nusron also suggested that the government lower excise tax imposed on clove cigarette products but increase that imposed on unflavored cigarette products. “Consumers of unflavored cigarette usually have a higher income than clove cigarette consumers,” he said.

The government has proposed an increase in tax excise for all cigarette products in a bid to boost revenue to 57 trillion rupiah ($6.27 billion) in 2010, up from 54 trillion rupiah in 2009.


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