Purbaya Wants Additional Cigarette Excise Layer to Take Effect This Year

Finance Minister Purbaya Yudhi Sadewa has stated that the government’s plan to add a new layer to the tobacco products excise tariff (CHT) or cigarette tax is still being discussed with the House of Representatives (DPR). Nevertheless, he confirmed that the implementation of the additional tariff layer will take effect this year. He could not yet confirm when the next meeting with members of the council would be to discuss its application. Currently, Purbaya said, the government and the DPR are still focused on discussing the state revenue and expenditure budget law and other policies. “But it will be implemented this year,” he said during a press conference on the state budget at the Ministry of Finance office in Jakarta, Tuesday, 21 July 2026. Previously, the government targeted the implementation of the additional tariff layer to eradicate the circulation of illegal cigarettes while also increasing state revenue. The plan is opposed by a civil society coalition consisting of the Center for Indonesia’s Strategic Development Initiatives (CISDI), the Indonesia Youth Council for Tactical Changes (IYCTC), and Ruang Kebijakan Kesehatan Indonesia (RUKKI). Beladenta Amalia, Lead for Tobacco Control at CISDI, asserted that the plan does not guarantee that illegal cigarettes will disappear from circulation. “We feel that they will certainly still exist. An additional layer will not guarantee that illegal cigarettes will voluntarily enter the existing system. Because of course, if they enter the system, it will reduce their profit margins,” Beladenta said last June. There are currently eight tiers of excise rates in effect in Indonesia for machine-made cigarettes and hand-rolled kretek cigarettes (SKT). IYCTC Executive Director Manik Margana Mahendra assessed that Indonesia’s cigarette excise tiers are the most complex in the world. He instead demanded that these tariff layers be simplified. According to Manik, the plan to add a new cigarette excise layer is ironic, considering the government is currently tightening its budget. If the layers are increased and cheap cigarettes are allowed to circulate freely, health budgets could actually swell because consumers will have easier access.