House Member Urges Affirmative Excise Policy for Small Cigarette Manufacturers

A member of Commission XI of the Indonesian House of Representatives (DPR RI), Said Abdullah, has requested that the government understand the diverse nature of the national tobacco industry, particularly small and medium-scale cigarette industries widely distributed across various regions.

According to him, the simplification of excise tariffs, specifically for Class III, has the potential to burden business sustainability and trigger an increase in the circulation of illegal, untaxed cigarettes.

Said cited the cigarette industry in Madura as an example, which is dominated by Class III manufacturers with varying product types and production capacities.

“We must be able to understand the character and patterns of the cigarette industry in the country,” he stated to the media in Jakarta on Sunday (2_2/6/2026).

The tobacco industry, particularly in Madura, operates across many levels, with most manufacturers falling into Class III. Their products are diverse, and their production scales vary significantly.

“If excise tariff classes are too simplified, especially for Class III, it will cause difficulties for small and medium-scale cigarette producers,” said Said.

The Chairman of the DPR RI Budget Committee assessed that, in an economic situation that has not yet fully recovered, the tobacco industry plays a vital role as a contributor to state revenue through excise and as a significant source of employment.

He noted that in Madura alone, the tobacco industry employs more than 186,000 direct workers, not including indirect labour or the broader economic impact on downstream sectors.

“Considering this, it is only fair that Class III excise tariffs are granted an affirmative policy,” he added.

According to Said, an affirmative policy is necessary to ensure that Class III manufacturers, with their diverse product variations and production capacities, can continue to operate legally.