Abstract
This research aims to investigate the existence of excise tariff policies on tobacco products and the enforcement of illicit cigarettes as well as the control variable of socioeconomic conditions on household cigarette consumption in 34 provinces in Indonesia. Using panel data from 2016-2019 with data from SUSENAS, BPS, and the Indonesian Directorate General of Customs and Excise. This study applies a fixed-effect panel regression model to estimate the impact of increasing tariffs and enforcement of illicit cigarettes on household cigarette consumption. The result is that a 1% increase in tobacco product tariffs will significantly reduce cigarette consumption by 1.056% while enforcement is not proven to significantly reduce cigarette consumption. The application of excise tariffs on tobacco products to control cigarette consumption is the right policy to reduce smoking prevalence. Improvements in the quality of the Human Development Index and the Gini ratio also significant in reducing smoking prevalence.
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