The Health Social Security Organizing Agency has experienced a Rp1.64 Trillion deficit - Photo by President Office

JAKARTA (TheInsiderStories) – President Joko Widodo has signed Presidential Regulation Number 82 of Year 2015 about the use of cigarette excise from the regions to cover the financial deficit of the Health Social Security Organizing Agency. The agency has experienced a Rp1.64 Trillion (US$113.10 million) deficit in this year.

The amount of cigarette tax contribution as intended, according to this presidential decree, is stipulated that 75 percent of the 50 percent realization of cigarette tax revenue is part of the rights of each province, regency or city.

“The decree has been signed and is being promulgated in the Ministry of Law and Human Rights,” said Special Staff Communication of the President Johan Budi Saptopribowo at the Presidential Palace, Jakarta this week.

The health insurance agency previously hoped that the government would channel funds from cigarette excise to balance its financial flows. The discussion on the use of cigarette excise has been carried out since May 2018.

This rule, he said, was issued after evaluating Presidential Regulation Number 12 Year 2013, as it has been amended several times, and the last time by Presidential Regulation Number 28 Year 2016 concerning the Third Amendment to Presidential Regulation Number 12 Year 2013 concerning Health Insurance.

The various provisions stipulated in the presidential decree. Provisions on the use of cigarette taxes are contained in Article 99 Chapter XII concerning regional government support, which states that the regional government must support the implementation of the Health Insurance program.

Regional Government Support as referred to through an increased achievement of participation in the region, compliance with contribution payments, improving health services, and other support in accordance with the provisions of the legislation in order to ensure the continuity of the Health Insurance program.

“Other support as intended is carried out through the contribution of cigarette taxes as part of the rights of each province/district/city,” read Article 99 paragraph (6) of this decree.

“The contribution as intended is immediately deducted to be transferred into the BPJS Health account,” read Article 100 paragraph (2).

Regional contributions to fund the Health Insurance program as referred to, according to this decree, are budgeted as social assistance spending on health functions in the provincial, district and city revenue and expenditure budgets.

“This Presidential decree comes into force on the date of promulgation,” read Article 108, which was promulgated by the Minister of Justice and Human Rights Yasonna H. Laoly on September 18, 2018.

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