Indodata: Illegal Cigarette Distribution Loses Rp97.81 Trillion To The State

Evidence of illegal cigarettes whose shipments were thwarted by Semarang Customs and Excise. BETWEEN

The Indodata Research Center revealed that the circulation of illegal cigarettes throughout 2024 consists of plain cigarettes or without excise stamps, fake cigarettes, wrong use of used cigarettes and mispersonalization resulting in potential state losses of IDR 97.81 trillion.

According to Indodata Research Center Executive Director Danis Saputra Wahidin, the largest illegal cigarettes in circulation were in the form of plain or without 95.44 percent excise stamps, followed by 1.95 percent of counterfeit cigarettes, 1.13 percent of saltuk, 0.51 percent of used, and 0.37 percent of salsons.

Data from 2021 to 2024, he continued in Jakarta, Saturday, shows that the number of illegal cigarette consumption has experienced a significant upward trend.

"The results of the study show that illegal cigarettes are circulating from 28 percent to 30 percent and we found a figure at 46 percent in 2024. The rise of illegal cigarettes, especially plain cigarettes, which is dominant, is estimated to have a state loss of Rp 97.81 trillion," said Danis in his statement.

According to him, the trend of smokers experiencing shifting or switching from consuming legal to illegal cigarettes. Smokers no longer smoke which is expensive but changes to consuming cheap cigarettes because it turns out that increasing the value or excise price is not effective in reducing the number of smokers in Indonesia.

The increase in the number of illegal cigarettes, he continued, was due to changes in cigarette consumption from class I, class II and class III to cheaper illegal cigarettes that followed market tastes in the form of plain, fake, saltuk, used, and salson.

"The amount of tobacco consumption is estimated to be not much different from the results of the Susenas and the UGM Yogyakarta survey, where the consumption of machine kretek cigarettes (SKM) is more consumed by both legal and illegal cigarette consumers, followed by machine white cigarettes (SPM) and hand-kretek cigarettes (SKT)," he said.

Danis stated that President Prabowo Subianto is expected to provide direction to the relevant Ministries/Institutions to formulate a cigarette policy that needs to be supported by objective, comprehensive, and inclusive studies, with valid, complete, and transparent data support, as an important basis for formulating and implementing appropriate and accurate policies, so that policy performance can be more effective and efficient.

"It needs to be accompanied by more intensive supervision and enforcement of extraordinary law on the circulation of illegal cigarettes, as one of the strategic efforts to support optimizing state revenues and protecting legal manufacturers in the country," he said.

The tobacco products industry (IHT), he added, is an industry that involves many stakeholders (tobacco farmers, clove farmers, laborers, and many more.

Therefore, it is necessary to involve broad stakeholders in formulating excise tariff policies and HJE is a must in order to obtain the widest possible perspective as the basis for effective decision making.