Illegal Cigarettes on the Rise, DPR Says State Could Lose Rp25 Trillion
Member of DPR RI’s Commission VII, Novita Hardini, emphasised that policies towards the Tobacco Products Industry (IHT) must be balanced between protecting public health and ensuring the economic sustainability of millions of national workers.
According to Novita, the tobacco industry is currently in a critical situation, facing regulatory health pressures, economic industry challenges, and the increasing circulation of illegal cigarettes in Indonesia.
“The tobacco industry cannot be viewed in black and white. This is a strategic national sector that contributes hundreds of trillions of rupiah to the state while supporting millions of citizens,” Novita stated in a written remark on Friday, 8 May 2026.
She explained that based on government data, state revenue from tobacco excise in 2025 reached more than Rp200 trillion, or over 70 percent of total national excise revenue. Additionally, this sector supports around 6 million workers, from tobacco and clove farmers, factory labourers, to small traders.
However, Novita highlighted the continuous decline in national legal cigarette production over the past three years. This condition is said to be influenced by regulatory pressures, weakening public purchasing power, and the proliferation of illegal cigarettes.
The PDI Perjuangan politician warned that uncoordinated policies could trigger serious social impacts, including the threat of mass layoffs in labour-intensive sectors.
Novita also assessed that the implementation of Government Regulation No. 28 of 2024 needs to be comprehensively reviewed because it is deemed to have broad impacts on the industrial, agricultural, fiscal, and employment sectors.
She further spotlighted plans to limit nicotine and tar levels, which are considered to potentially threaten the sustainability of kretek cigarettes as a distinctive Indonesian product with high domestic content.
“We support public health protection, especially for the younger generation. But policies must be data-based and involve all stakeholders, including farmers, workers, and industry players,” she said.
In addition, Novita viewed the circulation of illegal cigarettes as an urgent issue that must be immediately addressed by the government. She stated that the leakage in state revenue due to illegal cigarettes is estimated to reach Rp25 trillion per year.
According to her, this situation not only harms the state but also weakens the legal industry that complies with regulations. Therefore, she encouraged the establishment of a cross-ministerial task force to strengthen the eradication of illegal cigarettes from upstream to downstream.