JAKARTA - The government is drafting a policy to add a layer (layer) of tobacco excise (CHT) specifically for domestically produced cigarettes.
Minister of Finance Purbaya Yudhi Sadewa emphasized that his party had not calculated the potential revenue from the new tax layer.
However, he added that if the policy is implemented, state revenues are expected to be very large and could reach trillions of rupiah.
"Not yet, we haven't counted (the potential revenue). But later if it comes in, it will definitely be huge. How many trillion. There is a rough idea but we don't know yet. I think I have to go to the DPR as well for that. Because many DPR members come from the area of cigarettes, illegal cigarettes," he told the media, Tuesday, January 20.
Purbaya said that the main purpose of this policy is to ensure that illegal cigarettes enter the legal channel and if anyone tries to play tricks, his party will take firm action.
"But I'll see what it's like. But the goal is to make sure illegal cigarettes can play in a legal place. Then if anyone plays around, I'll hit them all," he explained.
Previously, Purbaya emphasized that this policy was intended to organize the tobacco industry as well as an instrument for eradicating illegal cigarettes which are still rampant.
He added that the addition of a tax layer would provide an opportunity for local products to enter a more organized legal channel.
"We are creating a special new tax, (but) it has not been decided. But what will be decided is that it will give room for illegal cigarettes to enter there. Later, once there is a tax, they will still play, we know where the industrial centers are: I will close," he told the media, Monday, January 19.
Purbaya added that this policy is targeted only for domestically produced cigarettes, while for illegally imported cigarettes, there is no tolerance and will immediately take firm action in the form of closing operations.
Currently, the CHT tariff structure in Indonesia consists of nine layers in accordance with PMK Number 97 of 2024.
The addition of this new layer is a continuation of the division of the cigarette excise tariff into two layers previously.
Despite the addition of layers, Purbaya emphasized that the government would not raise the cigarette tax rate in 2026.
He said the focus of next year's policy is to improve the industry structure and suppress the circulation of illegal cigarettes, not to add fiscal burdens for entrepreneurs.
"Actually, I thought I would lower it. But, they (industry actors) said it was enough to be consistent. Well, in 2026 the tax rate we will not raise," he explained.
The government targets the technical rules related to the addition of this layer to be completed in the near future.
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