14 arrested over fake excise stickers

Evi Mariani, Jakarta

The Jakarta Police arrested 14 people allegedly involved in a syndicate counterfeiting cigarette excise stickers that in seven years caused trillions of rupiah in state losses.

"The operation was jointly conducted with the Directorate General for Customs and Excise. We arrested the key suspect in the syndicate, AM, in Lasem, Central Java, last night," city police chief Insp. Gen. Makbul Padmanagara said on Thursday.

Police seized from alleged syndicate members about seven tons of evidence, mostly counterfeit excise stickers from two printing companies in Cikarang, Bekasi regency, and Pondok Kelapa, East Jakarta. Both printing companies belong to the key suspect, identified only as AM.

Police also arrested 12 employees of the printing companies, most of them involved in gluing holograms on the stickers.

"We have calculated that the seized stickers would have caused Rp 20 billion in state losses. The syndicate members claim they have operated for seven years," Makbul said.

Director General for Customs and Excise Eddy Abdurrahman said the buyers of the counterfeit stickers were mostly small to medium-sized clove cigarette companies in East Java.

"The stickers were printed with excise percentages of 4 percent, 8 percent and 26 percent. The percentages show that the stickers were to be attached to cigarette packages produced by small and medium-sized companies," he said.

Large cigarette companies have to pay an excise tax of up to 40 percent of the price of their cigarette packs.

"We suspect a lot of clove cigarette brands have been using these stickers," Eddy said. "But none of them were big brands."

In addition to the 14 alleged members of the syndicate, police also arrested three suspects identified only as HD, WIJ and MUJ, who own cigarette companies in Malang, East Java. The three companies are believed to have been long-time users of the counterfeit stickers.

By using counterfeit stickers, the companies would be able to avoid paying excise taxes.

Excise taxes from the cigarette industry is one of the main sources of money for the state budget. This year's excise target for the state budget is Rp 27.7 trillion.