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 an additional tariff layer for tobacco excise (CHT), or cigarettes, is still being discussed with the House of Representatives. Nevertheless, he is certain the implementation of the additional tariff layer will take effect this year.

He could not yet confirm when he would next meet members of the House to discuss its application. At present, Purbaya said, the government and the House are still focused on deliberating the state budget and other policies.

Once those deliberations are complete, Purbaya plans to meet the House again so that the additional tariff layer can be realised swiftly. “But it will be implemented this year,” he said at an APBN press conference at the Finance Ministry office in Jakarta on Tuesday, 21 July 2026.

Previously, the government targeted the implementation of the additional tariff layer to eradicate the circulation of illicit cigarettes while increasing state revenue. The plan has been opposed by a coalition of civil society groups comprising 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 would not guarantee the disappearance of illicit cigarettes from circulation. “In our view, illicit cigarettes will certainly remain. The additional layer will not guarantee that illegal cigarettes will voluntarily enter the existing system, because entering the system would naturally reduce their profit margins,” Beladenta said in June.

To date, there are eight excise band structures in force in Indonesia for the machine-made cigarette and hand-rolled clove cigarette (SKT) categories. IYCTC Executive Director Manik Margana Mahendra considers Indonesia’s cigarette excise layers to be the most complex in the world. He has instead demanded that the tariff layers be simplified.

According to Manik, the plan to add cigarette excise layers is ironic, given that the government is currently tightening its budget. If layers are added and cheap cigarettes circulate freely, the health budget could balloon, as consumers would gain easy access.