Jakarta, VIVA – The wave of layoffs (PHK) continues in labour-intensive industries such as manufacturing, garments and textiles. In conditions of weak purchasing power of the people, a government policy that does not support the industry will further worsen the situation.
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The President General of the Federation of Tobacco, Food and Beverage Workers’ Unions (FSP-RTMM), Sudarto, recalled that the threat of layoffs is not limited to these sectors alone. However, it also threatens the tobacco industry (IHT), which has been one of the largest employers of labour in Indonesia.
“Several labor-intensive industries that can create jobs and employ a large number of workers must be preserved and protected with good policies,” Sudarto said in a statement on Tuesday, September 17, 2024.
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Dried tobacco that is rolled into cigarettes at the factory.
According to him, the tobacco products industry (IHT), which is the rice paddy of workers, is now under strong pressure from various policies and regulations aimed at ending IHT. For example, the policy of increasing excise taxes is very high, provided for in PP 28/2024 and in the draft of the Minister of Health Regulation (RPMK).
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“In reality, under current conditions, state revenues are not being earned and illegal cigarettes are increasing. Meanwhile, legal cigarettes are under pressure from ever stricter regulations and people’s purchasing power is decreasing. “Over time, people who smoke legally may be deprived of illegal cigarettes.”
Sudarto stressed that the expected increase in cigarette tax in 2025 has the potential to increase the number of unemployed in Indonesia. In fact, IHT is a labor-intensive sector that employs millions of workers at various levels, from tobacco producers to factory workers and small traders. Therefore, the FSP-RTMM firmly rejects the plan to increase the excise tax on cigarettes in 2025.
“We are calling for no increase in excise duty on cigarettes in 2025. An increase in excise duty will only bring uncertainty to IHT, including the potential for workers to be made redundant and worsening the economic situation of workers who are already very frustrated, especially with the newly approved PP 28/2024 being made,” Sudarto said.
According to him, every year the OCI is always on alert against the threat of an increase in excise duties, the impact of which is felt across all sectors of the OCI, from automobile cigarettes to hand-rolled cigarettes.
“If the government and the various parties involved understand this, the excise tax should not be increased next year,” he said.
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