Using tobacco tax to plug up BPJS deficit tax against law

Jakarta (ANTARA News) – The National Committee for Tobacco Control said the government regulation using revenue from tobacco tax to help plug up deficit in public health insurance (BPJS) is against the law.

“Regional revenue from cigarette tax belongs to the regions in line with the mandate of the Law No 28 of 2009 on regional taxes and income,” an official of the Committee for Tobacco Control Widyastuti Soerojo said here on Wednesday.

The government has announced to use tobacco tax revenues to reduce the widening deficit recorded by BPJS from year to year. The contribution in tobacco tax revenue, however, is not enough to cover the widening deficit.

The deficit is predicted to reach Rp16 trillion this year, therefore, the government is considering to raise the BPJS monthly tariffs to be paid by the participants.

The Indonesian Association of medical doctors (IDI) and the House of Representatives have called for an increase in the BPJS tariffs saying the tariffs have to be raised otherwise deficit would be an endless problem besetting BPJS every year.

President Joko Widodo said the government is considering all options to help keep BPJS afloat.

Widyastuti said tobacco tax revenues could be used in emergency to prop up BPJS but not permanently under a Presidential Regulation.

With the presidential regulation, the government is tantamount to continuing burdening the regions with financing BPJS, she said.

Meanwhile, the Association of Indonesian Experts of Public Health (IAKMI) described as ironical the government regulation using tobacco tax revenue to help cover the BPJS deficit.

“It is an irony as the government will finance program to help prevent catastrophic disease with fund raised from tax on cigarette that causes the catastrophic disease,” deputy general secretary of IAKMI Mouhamad Bigwanto said here on Wednesday.

Bigwanto said the use fo tobacco tax to cover the BPJS deficit under the Presidential Regulation No. 82 of 2018 will cause bigger problem.

Problem will come when BPJS will rely on tobacco tax for coping with its deficit while the government is still reluctant to raise cigarette excise tariff and cigarette prices, he said.

“This will encourage an increase in cigarette production and consumption,” he said.

Source: ANTARA News