Cigarette Excise Tariffs Not Up 2026, Gaprindo: Tobacco Products Industry Can Breathe A Little

JAKARTA - The Association of Indonesian White Cigarette Producers (Gaprindo) appreciates the government's plan not to increase cigarette excise rates in 2026.

General Chairperson of Gaprindo Benny Wachjudi said that the no increase in cigarette excise rates next year is expected to have a positive impact on the sustainability of the tobacco products industry (IHT).

"Yes, we really appreciate what was conveyed by the Minister of Finance, Mr. Purbaya, discussing that there should be no increase in excise and maybe HJE is very important," said Benny, written Tuesday, September 30.

"Hopefully, by not increasing this (smoking excise rate), the tobacco products industry can breathe slightly, towards recovery," he continued.

Benny explained, production from machine kretek cigarettes (SKM) continues to decline.

He said SKM production reached IDR 15 billion in 2019 and then decreased to IDR 10 billion in 2024.

"Because the tobacco products industry, especially SKM, right, from 2019 the products are still above Rp. 15 billion, in 2024 it has decreased to Rp. 10 billion," he said.

In addition, said Benny, cigarette sales have also decreased by 9 percent per year.

For this reason, Benny hopes that the increase in excise rates next year will help restore the performance of the tobacco products industry in the future.

"Well, this (no increase in excise rates), right, returns it. I don't know if it can still be done. We hope it can go up, it's 10 percent, 10 percent can come back too. At least it can't be recovered again," he said.

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

He conveyed this certainty 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 Gappri this morning, a combination of Indonesian cigarette entrepreneurs. There were several people there, including from Djarum, Gudang Garam, from Wismilak. We discussed various things, 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.

Dalam diskusi tersebut, Purbaya sempat menanyakan pandangan pelaku industri terkait kemungkinan perubahan tarif cukai.

Namun, para produsen justru meminta agar tidak ada perubahan.

"Tapi satu hal yang saya diskusikan dengan mereka, apakah saya perlu merubah tarif cukai, ya, 2026? Mereka bilang asal enggak diubah sudah cukup, yaudah saya enggak ubah. Padahal, saya mikir mau turunin, dia minta asal tidak yaudah," tuturnya.

"Waktu itu minta turun, untungnya dia minta konstan saja, ya sudah kami enggak naikkan. Jadi, tahun 2026 tarif cukai tidak kami naikkan," tambahnya.

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 I discussed with them, do I need to change the excise rate, yes, 2026? They said as long as it wasn't changed it was enough, so I didn't change it. In fact, I thought I wanted to take it down, he asked as long as it wasn't okay," he said.

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