Finance Minister Purbaya Urged to Realise Madura Tobacco SEZ
The government’s proposal to introduce a new excise tax layer for tobacco products is seen as an opportunity to reform the governance of the national tobacco industry, particularly to provide greater space for farmers and small business operators to enter the legal pathway.
Cigarette entrepreneur and owner of Barong Group, HRM Khalilur R Abdullah Sahlawiy, known as Gus Lilur, believes the government is beginning to show a positive response to various issues in the tobacco sector, from illegal cigarettes and excise management to the future of the people’s cigarette industry.
Gus Lilur expressed this view in relation to the continuation of the aspirations of the Tritura for Madura Tobacco Farmers. He believes this momentum needs to be translated into concrete policies that favour farmers and small business operators.
Gus Lilur appreciates Finance Minister Purbaya Yudhi Sadewa’s plan to issue a new excise tax layer, which is considered more adaptive to the conditions of the people’s cigarette industry. According to him, this policy signals that the government is starting to recognise the need for differentiated treatment between large industries and small and medium enterprises.
“The plan to issue a new layer of excise tax for people’s cigarettes is a positive step and is eagerly awaited by small business operators,” said Gus Lilur in his statement on Tuesday (12/5/2026).
He noted that many small and medium cigarette enterprises have struggled to enter the legal pathway due to an excise structure that is too burdensome and disproportionate to their business capacity.
“If this new layer is truly implemented, it could serve as an entry point for the birth of a healthy, legal, and strong people’s cigarette industry,” Lilur stated.
In addition, he highlighted the importance of a comprehensive transformation for illegal cigarette operators to enter the legal system. According to him, a purely enforcement approach is insufficient to resolve the issue without realistic transitional pathways.
“Illegal cigarette entrepreneurs must be directed to enter the legal pathway, not just prosecuted,” Lilur said.
He believes that some illegal cigarette operators actually have production capacity and market access but are hindered by high costs and complex licensing systems. Therefore, more adaptive excise policies need to be accompanied by business transformation programmes.
“If the state wants to curb illegal cigarettes, the state must also provide an accessible legal pathway for small business operators,” he said.
Furthermore, Gus Lilur believes that organising the tobacco industry also needs to be directed towards establishing a Special Economic Zone (SEZ) for Madura Tobacco. According to him, the SEZ could be a long-term solution to build a more structured tobacco industry ecosystem that favours farmers.
“There, there will be integration between farmers, industry, trade, and supervision within a clear system,” Lilur stated.
He is optimistic that the existence of the SEZ can strengthen the Madura economy while driving increased state revenues, expanding the legal industry, and strengthening the position of tobacco farmers in the national industry chain.