Purbaya to Implement New Tobacco Excise Tax Layer in June 2026

Jakarta, CNBC Indonesia - Finance Minister Purbaya Yudhi Sadewa has confirmed that the new layer of tobacco excise tax rates (CHT), specifically aimed at encouraging illegal cigarette producers to become legal, will take effect in June 2026.

“Hopefully it can be implemented in June. There are still many illegal goods out there. So if they come out, they can enter that layer. And if anyone plays around, I’ll really shut them down. That’s a serious threat,” said Purbaya at his office in Jakarta on Monday (4/5/2026).

Before implementing the new CHT layer, he assured that he would consult with the DPR. He is currently awaiting the end of the DPR’s recess schedule, which has been ongoing since 22 April 2026.

Purbaya has repeatedly assured his commitment to implementing the new CHT layer to prevent the circulation of illegal cigarettes, which remains rampant in Indonesia. According to him, the circulation of illegal cigarettes is one of the causes of state revenue leakage.

Although difficult to measure, Purbaya estimates its value at 30% of the total annual tobacco excise revenue of around Rp200 trillion. Thus, the leakage from illegal cigarette circulation, according to him, amounts to Rp60 trillion.

“30% of Rp200 trillion is Rp60 trillion, let’s say I only get half of it, around 15%, maybe Rp20-30 trillion can be obtained,” said Purbaya on 21 April 2026.

He also emphasised that the new CHT layer to accommodate illegal cigarette producers is also to enable them to sustain their businesses legally.

“But the important thing is that the market becomes entirely legal, and those playing illegally will be shut down. Because now they claim they can’t survive. But if we resolve that, and give them space to enter, if they don’t join, we’ll shut them down,” Purbaya stressed.

In addition to the new CHT layer, Purbaya emphasised that illegal cigarette producers will also be given places in Special Economic Zones (KEK), just like other business actors, so they can legally run their businesses.

“So in one place, and it will be easier to inspect production. That’s one positive thing, I think, with the potential to increase state revenue, not disrupt it, because my assumption is that those entering there, the illegal players, at least we put them in one layer so they can enter the legal market. If given the legal market and they still violate, I’ll shut them down,” explained Purbaya.