Finance Minister Purbaya Urged to Implement Special Cigarette Excise Tariff

JAKARTA — Finance Minister Purbaya Yudhi Sadewa has been urged to promptly implement a special (reduced) excise tariff for tobacco products. Fathor Rozi, owner of PR Cahaya Pro, stated that the cigarette industry in Pamekasan continues to grow and absorbs significant labour. Meanwhile, he noted that the high excise burden has been particularly onerous for new business operators, resulting in some cigarette brands remaining unregistered officially. “During our meeting with Finance Minister Purbaya on 2 October 2025 in Surabaya, we proposed that the central government establish a more affordable tariff scheme, particularly for machine-rolled cigarette (SKM) operators. This would have a direct impact on the legality of the local tobacco industry, increased state revenue, and economic sustainability for Madura communities,” Fathor said on Friday (27 February 2026). During the meeting, Fathor directly proposed an excise tariff scheme for SKM positioned above hand-rolled cigarettes (SKT), ranging from Rp 150 to Rp 250 per stick. Currently, the excise tariff for SKT is recorded at Rp 122 per stick. “We spoke with one plain cigarette entrepreneur in Pamekasan. He is ready to register for excise if the SKM tariff is at most Rp 250 per stick. If it is above that, he cannot afford it,” Rozi explained. Fathor is optimistic that if more realistic tariffs are applied, small and medium-sized operators will be incentivised to enter the legal system. Consequently, illegal cigarette circulation could be suppressed and state excise revenue could potentially increase sustainably. The excise revenue target assigned to Bea Cukai Madura is recorded at over Rp 1.26 trillion. “However, the actual realisation exceeded the target, reaching Rp 1.7 trillion, driven by the contribution of registered excise companies, including PR Cahaya Pro,” he explained. Fathor also presented the history of excise regulation in Indonesia, ranging from Law Number 1 of 1961 on Excise to amendments through Law Number 39 of 2005.