Customs DG Djaka Reveals Latest Update on New Excise Tax Layer Plan for Cigarettes
Director General of Customs and Excise Djaka Budi Utama has revealed that his agency is still conducting a study on the plan to add a new tariff layer for Tobacco Products Excise. The addition aims to suppress the circulation of illegal cigarettes while maintaining industry stability.
“Regarding the new excise band proposed by the Minister of Finance, as of today we are still conducting a study on the possibility of a new layer for cigarettes or excise bands,” Djaka said during a press conference in Jakarta on Tuesday, 11 August 2026.
He stated that Customs and Excise, as the executor of the policy, is currently awaiting a decision from Finance Minister Purbaya Yudhi Sadewa. “We are waiting for the decision from the Minister on this matter. Because Customs and Excise is the executor, whatever is decided or whatever policy is made by the Ministry of Finance, we are ready to implement it,” he said.
It was previously reported that Finance Minister Purbaya Yudhi Sadewa has completed the proposal for adding a cigarette excise layer and will soon bring it to the House of Representatives. In the proposal, Purbaya aims to draw illegal cigarette distributors into the legal system by having them pay a specific excise duty. For those unwilling to switch to the legal system, Purbaya assured that firm action would be taken to shut down their illegal distribution businesses.
“Later, we will give them the opportunity to play in the legal market. If they don’t want to, we will shut them down,” he asserted in Jakarta last Friday.
Regarding the revenue projection from the legalisation of illegal cigarettes, Purbaya declined to provide a rough estimate and stated he would give a more precise prediction after the regulation has been in effect for about two months. “If it is truly as large as people claim, the contribution will be enormous. But we will see how it goes. I don’t want to guess before we see what it looks like after a month or two of implementation,” Purbaya said.