"The Increase In Excise Has Made The Circulation Of Illegal Cigarettes More Marak," INDEF PROVIDEs Several Solutions

Officials from the Regional Office of the Directorate General of Customs and Excise (DJBC) of South Kalimantan (Kalbagsel) checked cigarettes sold at a shop in Banjar Regency. (ANTARA/Firman)

JAKARTA - Executive Director of the Institute for Development of Economics and Finance (INDEF) Tauhid Ahmad said that the increase in cigarette excise rates in 2023 will actually have an impact on increasing the circulation of illegal cigarettes in Indonesia. "So, the circulation of illegal cigarettes is very dependent on the increase in cigarette excise rates. If the increase in excise tax rates is still normal, it is automatically the circulation of illegal cigarettes, yes, that's all," said Tauhid Ahmad in his statement, Tuesday, November 8. Tauhid said there are several ways to prevent the massive circulation of illegal cigarettes, one of which is the increase in cigarette excise rates is not too high. "Secondly, coordinating with industry players to monitor the circulation of illegal cigarettes. According to him, this coordination is very important to inform the government regarding illegal cigarette trafficking markets," he said. Third or last, expanding human resources (HR) in the regions, as well as increasing the budget related to the prosecution of illegal cigarette trafficking. "I believe that illegal cigarettes may be larger if compared to official data from Customs and Excise because from existing data it is an action not the circulation of illegal cigarettes. So, new instruments need to be built," he said.

For information, the Government has decided to increase the excise tariff on tobacco products (CHT) by 10 percent in 2023 to 2024. This is said to be one of the causes of the increasing circulation of illegal cigarettes in Indonesia at this time. Illegal cigarettes are cigarettes circulating in Indonesia, both from domestic and imported products that do not follow the applicable rules in Indonesian jurisdictions. The characteristics of illegal cigarettes include not being attached to excise tape (a plain cigarette), attached to excise tape that is not in accordance with its designation, attached to fake excise tape, and attached to used excise tape.