The Ministry Of Finance Reveals That The Prohibition Of Retail Cigarette Sales Will Not Disrupt State Revenue

The Directorate General of Customs and Excise (DJBC) of the Ministry of Finance (Kemenkeu) explained that the retail ban on cigarette sales will not have a negative impact on state revenues.

Director of Communication and Guidance for Customs Service Users Nirwala Dwi Heryanto explained that the policy would not have an impact on reducing excise revenues into the state treasury.

On the other hand, this policy can reduce the prevalence of smokers in Indonesia.

"Non-fiscal restrictions, it's like you can't retail, it's not complicated. Especially the retail ones, it's not decreasing (state revenues). But people want to smoke," he told the media crew, Wednesday, July 31.

Nirwala said that excise revenue from cigarettes was collected at the factory level, so that the ban on retail sales did not affect state revenues.

"Because the sales are from factories, it's already per pack. There are three boxes of cigarettes, namely cigarette excise, value added tax on the delivery of tobacco products (PPNHT), and a total of 68 percent of cigarette taxes. So, for example, if one box of cigarettes costs Rp. 10,000, then the state levy is Rp. 6,800," he said.

According to Nirwala, the non-fiscal restriction policy emphasizes more to reduce smoking prevalence than to become a state revenue strategy so that the ban on retail cigarette sales is expected to reduce people's desire to buy cigarettes because of high prices.

"If the price becomes more expensive, people will reduce purchases or quit smoking," he said.

For information, the prohibition on retail cigarette sales is contained in Government Regulation (PP) Number 28 of 2024 concerning Implementation Regulations of Law Number 17 of 2023 concerning Health.

It is stated in Article 434 Paragraph 1, that everyone is prohibited from selling tobacco products in units per stick, except for tobacco products in the form of cigars and electronic cigarettes.

For information, until the first semester of 2024, tobacco excise revenue (CHT) was IDR 97.84 trillion or contracted by 4.43 percent year on year (yoy).