Airlangga Reveals Cigarette Excise Does Not Increase To Give Certainty For Industry

Coordinating Minister for Economic Affairs Airlangga Hartarto opened his voice regarding the decision of the Minister of Finance, Purbaya Yudhi Sadive, not to increase cigarette excise next year.

According to him, the decision was quite good, because with cigarette excise that did not change, it made certainty for the cigarette industry clearer.

"I think it's good, because of course we see that the certainty for the industry has not changed," he told the media crew, Monday, August 29.

Previously, Minister of Finance Purbaya Yudhi Sadive emphasized that the government would not increase cigarette excise rates by 2026.

Meanwhile, this assurance was conveyed after holding a meeting with the Association of Indonesian Cigarette Factory (Gapri) 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 from them themselves it seems that they are 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 the Ministry of Finance would 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 conveyed 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.

Ia juga menyoroti adanya permintaan dari sejumlah perusahaan besar untuk masuk ke segmen pasar rokok murah yang umumnya diisi oleh produsen kecil.

Namun, hal tersebut perlu dipertimbangkan secara hati-hati agar tidak mematikan pelaku usaha kecil.

"Ya bagus untuk dia, tapi itu kan matiin yang lain. Saya akan pertimbangkan masukan-masukan seperti itu. Tapi yang kita atur adalah supaya yang kecil bisa hidup, yang besar juga bisnisnya enggak terganggu secara tidak fair gitu," ucapnya.

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 input 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.