Ministry of Finance Still Examining Plans for New Layer in Cigarette Tax Structure

Throughout last year, the Directorate General of Customs and Excise (DJBC) seized approximately 1.5 billion illegal cigarettes.

The Ministry of Finance (Kemenkeu) is still examining plans for adding a new layer to the tobacco excise tax (CHT) tariff structure. The Director General of Economic Strategy and Fiscal Affairs, Febrio Kacaribu, stated that the policy is still in the stage of technical deepening with a legal approach as the primary foundation.

“This is currently in the phase of study and technical deepening, and the approach remains a legal one,” Febrio said during a press conference for the March 2026 edition of APBN KiTa in Jakarta on Wednesday.

The assessment also considers enforcement efforts against the widespread distribution of illegal cigarettes. “This year, in just the first two months alone, enforcement has grown by over 100 per cent, meaning it has doubled. The primary approach by Mr Djaka (Customs and Excise Director General Djaka Budi Utama) and his colleagues is law enforcement,” he explained.

He added that the government is also considering labour aspects in the tobacco product industry during the assessment process. In this regard, the government is opening opportunities for business operators who have been operating illegally to transition to legal status by meeting tax obligations in accordance with regulations.

“We are considering and examining whether we should open space for this, but the illegality must still disappear. That is most important, so that when we do open up space, this would be cigarettes that comply with legislative regulations, namely paying excise tax at a fair rate,” he clarified.

Meanwhile, Deputy Minister of Finance Suahasil Nazara reported that by February 2026, enforcement actions against illegal cigarettes had been carried out 2,872 times, an increase of 44.1 per cent. From these enforcement actions, the amount of illegal cigarettes seized reached 369 million sticks, up 106.8 per cent compared to the previous period.