Tax on tobacco to cover public healthcare deficit
Indonesia’s Deputy Finance Minister Mardiasmo has said the government would start setting aside revenues from the tobacco excise duty next year to fund the Healthcare and Social Security Agency (BPJS Kesehatan), which has suffered a deficit since the programme kicked off in 2013.
As reported by kompas.com, Mardiasmo assured the agency's cash flow was secure through the year-end, after which the government would disburse fund to cover a shortage of 9 trillion rupiah (US$630 million).
He added that the government had disbursed 7.8 trillion for this year's deficit and an additional 2.1 trillion rupiah to pay the January 2018 premiums of low-income health insurance participants.
BPJS Kesehatan president director Fachmi Idris hoped that the plan to reallocate tobacco excise revenues to cover the agency's shortfall would not become embroiled in public debate.
“There is nothing wrong with the idea to use the tobacco excise duty to finance the healthcare programme,” Fachmi said, adding that it was an option to provide a sustainable financial resource for the healthcare programme even if the number of smokers continued to decrease.
The BPJS Kesehatan's deficit has always been covered by state funding according to Law No 24/2011, which stipulates that the agency's income must come from insurance premiums and government assistance.
The government has disbursed 18.84 trillion rupiah from 2013 to 2016 to support the agency.