Purbaya: No Increase in Cigarette Excise Duty in 2027

Finance Minister Purbaya Yudhi Sadewa has confirmed that the cigarette excise tariff policy will not change in 2027.

“There won’t be (an increase),” Purbaya said in the grounds of the State Palace, Jakarta, quoted on Friday (24/7/2026).

According to Purbaya, the tobacco excise policy will only undergo slight modification in its tariff layers.

He said a change planned since early this year — adding a new cigarette excise layer as an instrument to turn illegal cigarette producers into legal ones — will be implemented.

Purbaya said the addition of the new cigarette excise layer must first be discussed with the DPR’s Commission XI, after deliberations on the 2027 state budget bill are completed.

“There will be one new layer later. It must be reported to the DPR, and this will be done after this bill’s deliberations are finished,” he asserted.

As is known, before Purbaya took office as finance minister in September 2025, the government raised tobacco excise tariffs (CHT) almost every year by a weighted average of 10–12%. In the last 15 years, tariffs were only left unchanged three times: in 2014, 2019 and 2025.

In 2014, cigarette excise did not rise because of a new regulation, Law No. 28 of 2009 on Regional Taxes and Levies (PDRD). Under that law, 2014 was designated as a transition period for implementing the regional cigarette tax.

In 2019, cigarette excise was not raised on the grounds of economic slowdown and weakened purchasing power. However, many viewed the government’s decision as politically biased, as a presidential election was held that year.

In 2025, the government did not raise the CHT tariff, but it made adjustments to the retail sale price (HJE). This policy also continued into 2026.

Industry players had in fact proposed to Purbaya a three-year moratorium on excise and HJE increases, on the grounds that public purchasing power has not fully recovered.