Excise Tax Rises, Illegal Cigarette Industry Potential To Grow Rapidly, Kadin: Customs Obligatory Alert

Chairman of the East Java Kadin, Dwi Putranto (ANTARA)

JAKARTA - The East Java Chamber of Commerce and Industry (Kadin Jatim) has asked the Regional Customs and Excise Office to tighten the circulation of illegal cigarettes. Kadin assessed that the circulation of illegal cigarettes is quite rampant in East Java Province.

Chairman of the East Java Chamber of Commerce and Industry, Adik Dwi Putranto, said the request was based on the persistence of the Marine Patrol Task Force for the Special Region of Riau Islands and Tembilahan Customs in thwarting the smuggling of illegal cigarettes in the waters of Buluh Island, Riau.

"Because the circulation of illegal cigarettes does not only occur in Riau alone, in East Java there is actually a very large gap for illegal cigarette actors to carry out their actions. And I really appreciate the efforts made by the Special Customs of the Riau Islands Special Region which succeeded in thwarting illegal cigarette smuggling. "said Adik as quoted by Antara, Tuesday, January 19.

These efforts, he said, should be carried out considering the huge contribution of cigarette excise to state revenues.

The Ministry of Finance noted that the realization of excise revenue from tobacco or cigarette products until November 2020 reached Rp. 146 trillion or 88.53 percent of the target according to Presidential Decree 72 of 2020 amounting to Rp. 164.94 trillion.

This achievement grew 9.74 percent when compared to the same period last year reaching IDR133.08 trillion.

"And East Java is the province that provides the largest contribution. If the circulation of illegal cigarettes is not tightened, the government will potentially lose revenue, especially with the plan to increase cigarette excise by 12.5 percent in February," said the businessman from Kota Batu.

With this increase in excise, he predicts the circulation of illegal cigarettes will increase to 6 percent from 2020 which reached 4 percent.

"This must be watched out by the Customs and Excise authorities. Because with the increase in excise, cigarette prices are increasingly unaffordable. And this has become an easy area for the circulation of illegal cigarettes," he said.

Sulami Bahar, Chairman of the Cigarette Entrepreneurs Association (Gapero) Surabaya, also expressed the same thing. Apart from being the cause of loss of state revenue, the circulation of illegal cigarettes is also an obstacle to the development of the national cigarette industry.

"Decisive action from Customs and Excise is deemed necessary to provide a clear message to the elements, that the state will always be ready to protect the national cigarette industry players. In addition, periodic supervision also needs to be carried out to suppress criminal acts of illegal cigarette persons which are usually managed by a group of people. certain parties, "he said.