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The politics of funding universal healthcare: Diverting local tobacco taxes to subsidise the national health scheme in Indonesia

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  • Abdillah Ahsan
  • Elisabeth Kramer
  • Nadhila Adani
  • Askar Muhammad
  • Nadira Amalia

Abstract

In Indonesia, the national universal health coverage scheme (Jaminan Kesehatan Nasional [JKN]) has consistently overspent against its budget since it was introduced in 2014. In 2017, a new regulation diverted 37.5% of tobacco tax revenue collected at the district and city level to the central government in order to increase government contributions to the JKN. Through a review of policy documents and interviews and focus group discussions with relevant stakeholders, this article explores the history of the JKN and its relationship to local tobacco taxes. Offering an ex‐post assessment of the policy and its implementation, we find it negative on three fronts: funding for local anti‐smoking initiatives and services was cut, the procedures for implementing the policy were complex and time‐consuming, and it did not contribute as much as anticipated to the JKN. These findings underscore potential pitfalls of politically motivated policy that fails to consider implementation and impact. We recommend that the policy be revoked, and local tobacco tax revenue reallocated to its initial purpose, which includes promoting local smoking prevention programs and health service delivery.

Suggested Citation

  • Abdillah Ahsan & Elisabeth Kramer & Nadhila Adani & Askar Muhammad & Nadira Amalia, 2021. "The politics of funding universal healthcare: Diverting local tobacco taxes to subsidise the national health scheme in Indonesia," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 8(3), pages 351-366, September.
    • Handle: RePEc:bla:asiaps:v:8:y:2021:i:3:p:351-366
    DOI: 10.1002/app5.334
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    References listed on IDEAS

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    5. Bredenkamp, Caryn & Evans, Timothy & Lagrada, Leizel & Langenbrunner, John & Nachuk, Stefan & Palu, Toomas, 2015. "Emerging challenges in implementing universal health coverage in Asia," Social Science & Medicine, Elsevier, vol. 145(C), pages 243-248.
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    2. Anne Booth, 2023. "In Sickness and in Health: Diagnosing Indonesia ‐ by Firman Witoelar and Ariane Utomo," Asian-Pacific Economic Literature, The Crawford School, The Australian National University, vol. 37(1), pages 134-138, May.

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