Minister Of Finance Purbaya Ensures Permanent Cigarette Excise Tariffs In 2026

Minister of Finance (Menkeu) Purbaya Yudhi Sadive emphasized that the government will not increase cigarette excise rates by 2026.

Meanwhile, this assurance was conveyed after holding a meeting with the Association of Indonesian Cigarette Manufacturers (GAPPRI) including representatives from cigarette manufacturers, such as Djarum, Gudang Garam, and Wismilak on Friday, September 26.

"I met with Gapri this morning, a combination of Indonesian cigarette entrepreneurs, there were several people there, including from the needle, from the Salt Law, from Wismilak. We discussed various kinds, they gave a lot of input, it just seems that the input must be sorted again, because it is quite complicated," he said in a media briefing, Friday, September 26.

He added that it appeared that they were still not uniform about what should be proposed, so he asked them to discuss and reformulate more structured and not one-sided inputs.

"But I ask them to write down their input again, discuss between them, so that the input does not benefit one another or harm others," he said.

In the discussion, Purbaya had asked the views of industry players regarding the possibility of changing excise rates. However, the producers actually asked that there be no changes.

"But one thing that I discussed with them, do I need to change the excise rate in 2026? They said as long as it wasn't changed it was enough, so I didn't poison it. At first, even though I thought I wanted to take it down, he asked as long as it wasn't," he said.

"At that time he asked to go down, fortunately he just asked for a constant, so we didn't increase it. So in 2026 we won't increase the excise rate," he added.

Furthermore, Purbaya stated that the main focus at this time is to eradicate the circulation of illegal cigarettes, both from within the country and imports illegally because illegal products harm the state for not paying taxes.

According to him, if all illegal products are eradicated without a solution, it can destroy small business actors and he wants to keep the industry alive, but still obey the rules.

"If we kill all of them, they will die. So my goal is to maintain, and create jobs that are also not fulfilled," he explained.

For this reason, he said that the Ministry of Finance will plan to build a special system to regulate the tobacco products industry (IHT), one of the concrete steps is to form a centralized tobacco industrial area to suppress the circulation of illegal cigarettes.

He said that this plan had been implemented in Kudus, Central Java, and Parepare, South Sulawesi, and in the future it would be developed in other cities to attract illegal industry players to enter the official system and pay excise according to the rules.

"So they can enter the system. So we can't just defend big companies, but the small ones can also enter the system and of course have to pay excise, right? We arrange so that they can compete enough with big companies," he explained.

He also highlighted the demand from a number of large companies to enter the cheap cigarette market segment which is generally filled by small producers. However, this needs to be considered carefully so as not to kill small business actors.

"Yes, it's good for him, but that's another thing to kill. I will consider inputs like that. But what we arrange is that small ones can live, the big ones also don't interfere with their business unfairly," he said.