Customs Foils Distribution of 8.9 Million Illicit Cigarettes

The Jakarta Customs and Excise Office, together with the Jakarta Regional Office and the Banten Regional Office, has successfully thwarted the distribution of 8,944,800 illicit cigarettes without excise stamps. Through this operation, Customs managed to safeguard potential state losses of up to Rp8.66 billion. “The potential state losses consist firstly of excise revenue amounting to Rp6.67 billion, cigarette tax of approximately Rp667.28 million, and VAT on tobacco products of around Rp1.2 billion. The total overall is Rp8.66 billion,” said Director General of Customs and Excise Djaka Budi Utama at a press conference in Jakarta on Tuesday. The action began with a tip-off from the public regarding the suspected shipment of illicit excisable goods using a truck transiting the Jakarta Customs supervision area. After investigation and analysis, a joint team from Jakarta Customs and the Metro Jaya Police Highway Patrol conducted an enforcement operation on Saturday at 3:15 p.m. Western Indonesian Time at KM 35.8 of the Jakarta Outer Ring Road. During the inspection, officers discovered 8,000,800 illicit cigarettes of the SS brand without excise stamps, which were then seized and taken to the Jakarta Customs Office for further examination. PY, the truck driver, and YK, the delivery supervisor, were also detained. Based on information obtained from PY, the illicit cigarettes were sent on the orders of HH, a goods controller in Pamekasan, destined for a warehouse on Jalan Kampung Kemeranggen, Taman Baru, Taktakan District, Serang City, Banten. On Sunday, a joint team from Customs and the Military Police Centre conducted a follow-up operation and found an additional 944,000 illicit cigarettes of the SS and 41 brands without excise stamps stored in the warehouse. It was established that the cigarettes in the warehouse belonged to AS. In total, the seized goods amounted to 8,944,800 illicit cigarettes, with an estimated goods value of Rp13.28 billion and potential state losses safeguarded reaching Rp8.66 billion. That value comprises potential excise revenue of Rp6.67 billion, cigarette tax of Rp667.28 million, and value-added tax on tobacco products of Rp1.32 billion. Djaka stressed that eradicating illicit cigarettes is part of efforts to protect the public, maintain a healthy business climate, and secure state revenue. “This enforcement against the circulation of illicit cigarettes represents a form of protection for the public from non-compliant products, protection for business actors who comply with regulations, and an effort to safeguard state revenues used to finance development and public services,” he said. The success of the illicit cigarette enforcement also contributes to maintaining the sustainability of the legal tobacco products industry and saves approximately 3,578 hand-rolled cigarette workers from potential job losses. According to Djaka, the circulation of illicit cigarettes creates unfair business competition because legal business actors have fulfilled their excise payment obligations and other statutory provisions. Therefore, Customs will continue to strengthen supervision and enforcement through synergy with law enforcement officials and public support. This case has been elevated to the investigation stage. During the investigation process, Customs is cooperating with the Directorate of Special Criminal Investigation of the Metro Jaya Police to ensure the investigation proceeds in accordance with applicable regulations. Currently, PY has been named a suspect, while further investigation and examination are still being conducted on several other parties suspected of being linked to the illicit cigarette distribution network.