DPR Commission XI backs Purbaya's plan to keep cigarette tax unchanged in 2027

The tobacco excise is currently the most pressing issue and must be addressed promptly, with the rise of widespread illegal cigarettes. The Indonesian government says it will keep the tobacco excise tariff (CHT) unchanged in 2027. Mukhamad Misbakhun, chair of Commission XI of the DPR RI, backed Finance Minister Purbaya Yudhi Sadewa’s policy to maintain the CHT in 2027, arguing that the decision would provide relief to the tobacco industry and help preserve jobs. ‘Yes, that’s Mr Purbaya’s policy and if that indeed becomes state policy, we will reinforce it, because what? CHT… not rising provides relief to the industry so they can continue. Then they can still employ people and the business continues,’ Misbakhun said at the Parliament Complex, Jakarta, on Wednesday. Additionally, regarding the idea of adding a layer to the cigarette excise, Misbakhun explained that this would still be undertaken with the government. ‘The issue of excise layers is something we are discussing when to hold a meeting, because the proposal must come from the Finance Minister, but its adoption must be discussed with the DPR,’ he said. According to Misbakhun, the government is currently seeking a solution to tackle the proliferation of illegal cigarettes, which is seen as a leakage of state revenue. ‘The tobacco excise is currently the most serious issue and must be addressed promptly, namely the widespread circulation of illegal cigarettes,’ he continued. Earlier reports stated that Purbaya said he did not plan to change the cigarette tax rate in 2027. Consequently, the cigarette tax rate for the next year will neither rise nor fall. Purbaya said the government is focusing on maintaining stability of the tobacco industry while strengthening revenue collection from the sector. ‘(Cigarette tax) I will keep it constant, not rising and not falling. I want to see stability first,’ he told reporters at the Finance Ministry office in Jakarta on Tuesday (19/5). Instead of changing the tax rate, the government will focus on strengthening supervision of the tobacco industry through digitalisation. One of the steps prepared is the installation of production-counting machines at several cigarette factories. This strategy is intended to determine the real potential state revenue from the tobacco industry while curbing illegal cigarette circulation. The government will monitor revenue developments after the monitoring system is implemented. The evaluation results will form the basis for determining the direction of tobacco tax policy in the subsequent period.